AUD/USD: Moves Through Resistance At 0.93 To 2-Week High
MarketPulse | May 07, 2014 02:00AM ET
AUD/USD for Wednesday, May 7, 2014
Over the last couple of weeks or so the Australian dollar has fallen back down below the 0.93 level and settled within a very narrow range just below the level before surging up through this level in the last 24 hours. It was placing ongoing pressure on the resistance at 0.93 before breaking higher. This level had been providing reasonable resistance over the last week or so denying any movement higher and is likely to play a role again should the AUD/USD retreat lower. The last month or so has seen the Australian dollar drift 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. For the best part of February and March the Australian dollar did very little other than continue to trade around the 0.90 level, although at the beginning of March it crept a little lower down to a three week low below 0.89. Towards the end of March however, the Australian dollar surged higher strongly moving to the resistance level at 0.93 before consolidating for a week or so.
For several months either side of the New Year the Australian dollar established and traded within a narrow range roughly between 0.88 and the previous resistance level at 0.90. Back in January the Australian dollar was able to rally higher pushing through the resistance at 0.90 to a one month high near 0.91, however it quickly returned to more familiar territory below the resistance levels at 0.90 and 0.88. After showing some resilience in early December moving to a one week high above 0.9150, the AUD/USD spent the next two weeks turning around sharply and falling heavily down to a then three month low close to 0.88.
The RBA on Tuesday left interest rates unchanged at a record low of 2.5 percent , in line with market expectations. In a statement, the central bank said the Australian dollar remains historically high. The RBA added that it sees a period of stability for interest rates and an improvement in the labor market, although it would be sometime yet before unemployment declines consistently. The central bank's decision comes a week before the coalition government is due to hand down its first budget since winning the elections in September last year. The government has already warned of a tough budget, which will likely include temporary income tax hikes, raising the retirement age and cuts to spending on social services in a bid to trim the country's deficit. "The RBA is comfortable with where things sit at the moment," said Matthew Circosta, an economist at Moody's Analytics. "It's interesting they mentioned the budget, the government is talking tough ahead of the federal budget next week." "I agree with the sentiment on the labor market, I think that's what they are going to be watching closely over the next three to six months and that is probably where we need to look at for where rates are headed. If we start to see a meaningful decline in unemployment rate, then the RBA will start consider hiking rates," he added.
Get The News You Want
AUD/USD May 7 at 00:05 GMT 0.9347 H: 0.9353 L: 0.9340
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.9220 | 0.9100 | --- | 0.9380 | 0.9400 | --- |
During the early hours of the Asian trading session on Wednesday, the AUD/USD is just easing back a little from resistance around 0.9380 after recently surging through the resistance level at 0.93 in the last 24 hours. 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 well above 0.90 again. Current range: trading just below 0.9380 around 0.9350.
Further levels in both directions:
• Below: 0.9220 and 0.9100.
• Above: 0.9380 and 0.9400.
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 50% as the Australian dollar surges through the key 0.93 level. The trader sentiment remains in favour of long positions.
Economic Releases
- 01:30 AU Retail Sales (ex inflation) (Q1)
- 01:30 AU Retail trade (Mar)
- 12:30 CA Building permits (Mar)
- 12:30 US Non Farm Productivity (Prelim.) (Q1)
- 12:30 US Unit Labour Costs (Prelim.) (Q1)
- 19:00 US Consumer Credit (Mar)
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.