MarketPulse | May 25, 2016 08:27AM ET
The Australian dollar continues to have an uneventful week, as the pair trades at the 0.72 line in the Wednesday session. On the release front, Australian Construction Work Done came in at -2.6%, below expectations. Australia will publish Private Capital Expenditure for the first quarter, with the markets bracing for a sharp decline of 3.2%. Over in the US, we’ll get a look at Goods Trade Balance and Crude Oil Inventories. On Thursday, the US will release durable good reports.
Australia’s construction sector continues to struggle. Construction Work Done declined 2.6 in the first quarter, marking a third consecutive quarter of contraction. The Australian dollar remains under pressure and is trading close to 10-week lows. Much of the Aussie’s woes can be attributed to the RBA, which unexpectedly cut rates in early May. Last week, the RBA minutes hinted at another rate cut, as inflation levels remain stubbornly low. The currency lost more ground on Tuesday, as RBA Governor Glenn Stevens defended the RBA’s monetary policy, saying that there was no need to change the 2 percent to 3 percent target band for inflation. The RBA has put the markets on notice that it is considering further rate cuts, but the Australian dollar’s 500-point plunge since late April has given the central bank some breathing room. We’re unlikely to see the RBA make any moves prior to August, since the government has called an election for July 2.
AUD/USD Fundamentals
Tuesday (May 24)
Wednesday (May 25)
Thursday (May 26)
*Key releases are highlighted in bold
*All release times are EDT
AUD/USD for Wednesday, May 25, 2016
AUD/USD May 25 at 8:00 EDT
Open: 0.7188 Low: 0.7172 High: 0.7219 Close: 0.7207
AUD/USD Technical
S3 | S2 | S1 | R1 | R2 | R3 |
0.6916 | 0.7049 | 0.7160 | 0.7251 | 0.7339 | 0.7472 |
Further levels in both directions:
OANDA’s Open Positions Ratio
AUD/USD ratio is unchanged on Wednesday, consistent with the lack of movement from AUD/USD. Long positions have a strong majority (60%), indicative of trader bias towards AUD/USD breaking out and moving higher.
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