To finish out last week, the AUD/USD dropped sharply again to resume its medium term down trend as it moved down towards the key long term level of 90 cents. It has made a recent rally back up towards 0.91 however in the last hour, has reversed and it easing back towards 0.9050. In the middle of last week it surged higher to within a whisker of the 93 cents level before falling away to close out the week. This surge higher did come on the back of a couple of solid days of movement higher as it was able to continue its rally making its way up towards the 0.92 level. The 0.9150 level had become a key level over the short term providing both some resistance and more recently support, however this also been broken again late last week.
Over the last couple of weeks the AUD/USD continued to drift a little lower and move towards the 90 cents level, a level not seen for three years. Throughout the last week, it was able to temporarily halt the decline by finding some support at 0.91 which has resurfaced in the last couple of days to provide some support. Its pattern during this time is one that has been seen several times over the last month or so which has resulted in lower prices following – this time is no exception as it moves lower towards 0.90.
The last few months have seen the AUD/USD establish a strong medium term down trend with lower peaks and lower troughs, as it has moved from near 1.06 down to near 0.90 in that time. In doing so, it has completely ignored any likely support at either 1.04 or 1.0360, and more recently the long term support level at 0.97. Up until mid April, the Australian dollar was enjoying its best move higher since October and November last year. After making a solid run higher in the middle of June back towards the key level of 0.97, the AUD/USD has since continued its strong and steady decline moving to within reach of 0.90 and levels not seen since near the middle of 2010. This has seen it experience a significant strong trend that would have caught many people on the wrong side of.
The Australian dollar continues to lose ground against its US counterpart and has given up the gains accumulated earlier last week. On Thursday, US employment numbers disappointed, while Australia’s employment data was mixed. In Friday’s releases, Australian Home Loans, a key indicator, climbed to 1.8%, but this fell short of the estimate of 2.3%. Australian Employment Change looked good, as the indicator jumped from 1.1 thousand to 10.3 thousand in June. The markets had expected a negligible gain of 0.3 thousand. However, full-time positions actually decreased, while part-time jobs posted gains. The Unemployment Rate climbed from 5.5% to 5.7%, edging above the estimate of 5.6%. This is the highest rate in almost four years, and points to continuing weakness in the labor market. 
AUD/USD July 15 at 00:50 GMT 0.9063 H: 0.9087 L: 0.9048
During the early hours of the Asian trading session on Monday, the AUD/USD has been slowly edging up towards 0.91 after finding some solid short term support at 0.9050 however is now drifting a little lower. The Australian dollar is still in the middle of a free-fall, as the currency has lost around 13 cents since the beginning of May. In moving through to 1.0580 only a few months ago, it moved to its highest level since January. Current range: trading right around 0.9090
Further levels in both directions:
• Below: 0.9000
• Above: 0.9100
(Shows the ratio of long vs. short positions held for the AUD/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The long position ratio for the AUD/USD has shot back above 70% again as the Australian dollar has fallen back towards 90 cents to finish out last week. The trader sentiment remains strongly in favour of long positions.
Economic Releases
- 01:30 AU New motor vehicle sales (Jun)
- 12:30 US Empire State Survey (Jul)
- 12:30 US Retail Sales (Jun)
- 14:00 US Business inventories (May)