AUD/USD – Aussie Falters as Business Confidence Slips

The Australian dollar continues to lose ground against its US counterpart. The pair is trading in the low-0.93 range in Tuesday trading, its lowest level since early October. The Aussie dropped after NAB Business Confidence fell to a three-month low. It’s another quiet day in the US, with no releases on Tuesday.

The Aussie continues to weaken badly against the US dollar and has lost about 200 points since Thursday. The currency took a hit on Tuesday as NAB Business Confidence dropped to 5 points in October, a sharp drop from 12 points in the previous release. This points to weaker business confidence in the economy. If Consumer Sentiment follows suit on Wednesday with a weak release, we could see the Australian dollar’s woes continue.

The struggling Aussie can’t seem to get a break, even when Australian numbers are strong. On Monday, the currency failed to take advantage of Home Loans, which rebounded from a sharp loss of 3.9% in September, jumping 4.4% last month. This easily beat the estimate of 3.6% and was the sharpest gain the indicator has posted since April. The strong figure points to increased activity in the housing market as well as stronger consumer spending, a critical component of economic growth.

Over in the US, the markets had very low expectations from Non-Farm Payrolls, one of the most important economic indicators. The estimate for the October release stood at just 121 thousand, as there was concern that the reading would be artificially low due to the government shutdown in October. However, the indicator put those concerns to rest, as the indicator soared to 204 thousand, its highest level in eight months. The outstanding NFP figure bolstered the US dollar against the major currencies, and has increased speculation that the Fed might press the tapering trigger in December. Such talk could bolster the US currency, as a reduction in QE is bullish for the dollar. At the same time, speculation about a scaling down in QE introduces some uncertainty and volatility in the currency markets.

AUD/USD for Tuesday, November 12, 2013

AUD/USD November 12 at 13:10 GMT

AUD/USD 0.9325 H: 0.9368 L: 0.9312

AUD/USD Technical

• AUD/USD continues to lose ground in Tuesday trading. The pair touched a low of 0.9312 earlier in the European session.
• On the upside, the round number of 0.9400 is providing resistance. This line has some breathing room as AUD/USD trades at lower levels. This is followed by resistance at 0.9508.
• AUD/USD pair is receiving support at 0.9305, which is protecting the 0.93 level. This is followed by a support level at 0.9229, which has remained intact since mid-September.
• Current range: 0.9305 to 0.9400

Further levels in both directions:

• Below: 0.9305, 0.9229, 0.9119 and 0.9000
• Above: 0.9400, 0.9508, 0.9613 and 0.9700

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains by short positions in Tuesday trading. This is reflected in the current movement of the pair, as the Australian dollar continues to post losses. The ratio is made up of a majority of open long positions, reflecting a trader bias towards the Australian dollar moving to higher ground.

AUD/USD continues to point downwards, as the Aussie’s woes continue. With no US releases on Tuesday, the pair’s movement is likely to be limited during the North American session.

AUD/USD Fundamentals

• 23:30 Australian Westpac Consumer Sentiment.
• 23:30 Australian Wage Price Index. Estimate 0.8%.

*Key releases are highlighted in bold

*All release times are GMT

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