AUD/USD – Little Change as Markets Await ECB Meeting

AUD/USD has quieted down after starting the week with gains. The pair was trading in the mid-1.03 range in the European session. Trading is cautious, as the markets await the ECB policy meeting on Thursday. In economic news, Australian Private Sector Credit came in at 0.2%, just below the estimate of 0.3%. Australian AIG Manufacturing Index will be released later on Tuesday. In the US, today’s key release is CB Consumer Confidence.

As was widely expected, the Bank of Japan did not announce any new monetary stimulus at its policy meeting last Friday. The central bank noted that it could take more than two years to reach its 2% inflation target. This possibility has been underscored by recent Japanese inflation releases, which continue to point to deflation in the economy, despite the best efforts of the BOJ to create some inflation. This could mean that the central bank will resort to further easing measures later in the year.

Will we see a rate cut from the ECB later this week? The Eurozone continues to stagnate with poor releases, highlighted by another record high for Eurozone Unemployment Rate, which edged to 12.1%, up from 12%. Speculation that the ECB will take action and lower rates is growing. Goldman Sachs released a statement on Thursday, stating that it expects a 0.25% cut when the ECB meets this week. The prestigious firm also downgraded Eurozone growth for 2013, from -0.5% to -0.7%. All eyes will be on the ECB, which will set this month’s interest rates on Thursday.

There was more disappointing news out of the US on Friday, as GDP fell below expectations. With a long string of weak releases for the past month, the GDP reading appeared to underscore the recent disappointing data. The key indicator improved sharply, climbing from -0.1% to 2.5%. However, the markets had anticipated a gain of 3.1%. The weaker than expected reading from one of the most important economic indicators should serve as a wakeup call that the US economy is hitting turbulence, which could affect the US dollar.

 

AUD/USD for Tuesday, April 30, 2013

Forex Rate Graph 21/1/13
 

AUD/USD April 30 at 12:20 GMT

1.0335 H: 1.0373 L: 1.0275

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
1.0174 1.0230 1.0298 1.0350 1.0424 1.0508

 

AUD/USD is quiet in Tuesday trading. The pair continues to put pressure on the 1.0350 line. There is stronger resistance at 1.0424. On the downside, the pair is receiving support at 1.0298. This is followed by a support level at 1.0230.

Current range: 1.0298 to 1.0350

 

Further levels in both directions:

  • Below: 1.0298, 1.0230, 1.0174, 1.0080 and 1.00.
  • Above: 1.0350, 1.0424, 1.0508 and 1.0568

 

OANDA’s Open Position Ratios

The AUD/USD ratio is quiet in Tuesday trading. We are seeing this in the pair, which has settled down after the Aussie started the week with strong gains against the US dollar. Traders should monitor the ratio for any movement, which could be a sign that the pair will swing back into action.

The Australian dollar has taken a breather, as AUD/USD is quiet in Tuesday trading. With the US releasing key consumer data later in the day, we could see the pair show more movement, if the release is not in line with market expectations.

 

AUD/USD Fundamentals

  • 1:30 Australian Private Sector Credit. Estimate 0.3%. Actual 0.2%.
  • 12:30 US Employment Cost Index. Estimate 0.5%.
  • 13:00 US S&P/CS Composite-20 HPI. Estimate 9.1%.
  • 13:45 US Chicago PMI. Estimate 52.5 points.
  • 14:00 US CB Consumer Confidence. Estimate 61.4 points.
  • 23:30 Australian AIG Manufacturing Index.

 

*Key releases are highlighted in bold

*All release times are GMT

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.