AUD/USD for Wednesday, November 5, 2014
In the couple of days to start this week the Australian dollar has fallen sharply from above the resistance level at 0.88 back down and found solid support at the other key level of 0.8650. It did well throughout last week to spend most of its time above the 0.88 level however it has now returned into the main trading range which has been established for over a month between 0.8650 and 0.88. During this time the Australian dollar has done well to stop the bleeding and trade within this range after experiencing a sharp decline throughout September which saw it move from close to 0.94 down to below 0.8650 and an eight month low in the process. The resistance level at 0.88 remains a factor and is continuing to place downwards pressure on price, however more recently all eyes have turned on to the support level at 0.8650 to see if the Australian dollar can remain above it.
Back at the beginning of September the Australian dollar showed some positive signs as it surged higher again bouncing off support below 0.93 and reaching a new four week high around 0.94 however that all now seems a distant memory. The Australian dollar reached a three week high just shy of 0.9480 at the end of July after it enjoyed a solid period which saw it surge higher through the resistance level at 0.9425 to the three week around 0.9480, before easing back towards that level. The Australian dollar enjoyed a solid surge higher reaching a new eight month high above 0.95 at the end of June, only to return most of its gains in very quick time to finish out that week. Since the middle of June the Australian dollar has made repeated attempts to break through the resistance level around 0.9425, however despite its best efforts it was rejected every time as the key level continued to stand tall, even though it has allowed the small excursion to above 0.95.
After the Australian dollar had enjoyed a solid surge in the first couple of weeks of June which returned it to the resistance level around 0.9425, it then fell sharply away from this level back to a one week low around 0.9330 before rallying higher yet again. Its recent surge higher to the resistance level around 0.9425 was after spending a couple of weeks at the end of May trading near and finding support at 0.9220. Throughout April and into May the Australian dollar drifted lower from resistance just below 0.95 after reaching a six month high in that area and down to the recent key level at 0.93 before falling lower. During this similar period the 0.93 level has become very significant as it has provided stiff resistance for some time. The Australian dollar appeared to be well settled around 0.93 which has illustrated the strong resurgence it has experienced throughout this year.
The Reserve Bank left the cash rate unchanged at 2.5 per cent at its Melbourne Cup day board meeting. The Australian dollar hit a one-month low of 86.46 US cents in morning trade, due partly to an upward revision to the September unemployment rate by the Australian Bureau of Statistics. Australia’s trade deficit has doubled, as a falling Australian dollar and lower commodity prices push the nation’s balance sheet further into the red. The deficit blew out to $2.261 billion in September, making it the sixth consecutive month the trade figures have been in the red. It was at $1.013 billion in August. Exports rose one per cent, while imports were up six per cent, the Australian Bureau of Statistics said on Tuesday. The Australian dollar fell 6.3 per cent in September to end the month at 87.50 US cents, making exports cheaper and imports dearer. JP Morgan economist Tom Kennedy said the weaker exchange rate had its biggest influence on the value of imports across all categories. “The swift move lower in the currency through September appears to have influenced both sides of the trade ledger, with import values the notable outperformer,” he said. “Indeed, import values recorded the strongest monthly growth rate since September 2009, vaulting 5.6 per cent higher in the month.”
AUD/USD November 4 at 21:40 GMT 0.8732 H: 0.8749 L: 0.8645
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.8650 | — | — | 0.8800 | 0.9000 | 0.9100 |
During the early hours of the Asian trading session on Wednesday, the AUD/USD is trying to rally higher up through 0.8750 after recently moving strongly off the support level at 0.8650. The Australian dollar was in a free-fall for a lot of last year falling close to 20 cents and it has done very well to recover slightly to near 0.95 again earlier this year. Current range: trading right around 0.8740.
Further levels in both directions:
• Below: 0.8650.
• Above: 0.8800, 0.9000, and 0.9100.
OANDA’s Open Position Ratios
(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 moved back towards 65% as the Australian dollar tried to rally up from the support level at 0.8650 after falling sharply lower through the resistance level at 0.88. The trader sentiment remains in favour of long positions.
Economic Releases
- 09:00 EU Composite PMI (Oct)
- 09:00 EU Services PMI (Oct)
- 09:30 UK CIPS/Markit Services PMI (Oct)
- 10:00 EU Retail Trade (Sep)
- 13:15 US ADP Employment Survey (Oct)
- 15:00 US ISM Non-Manufacturing (Oct)