AUD/USD – Aussie Edges Higher, Tests 0.94

AUD/USD has edged higher as we begin the new week. In Monday’s European session, the pair is trading at the 0.94 level. On Friday, the US wrapped up a disappointing week with Empire State Manufacturing Index, which slumped to a ten-month low. The sole Australian release on Monday is the CB Leading Index. There are no major US releases on Monday.

The RBA will release the minutes of its last policy meeting on Tuesday, and this release could affect the movement of AUD/USD. At the previous policy meeting, the Bank did not reduce rates, but did state that it felt the Aussie was overvalued, and the currency could lose ground if the minutes reiterate this assessment.

Unemployment Claims have been fairly steady over the past few weeks, but with speculation increasing about a possible December taper by the Federal Reserve, every employment release is under the market’s microscope. On Thursday, the key indicator showed little change with a reading of 339 thousand, but this was above the estimate of 331 thousand. There wasn’t any relief from Thursday’s other key release, Trade Balance. The October deficit widened to -$41.8 billion, compared to -$38.8 billion in September. This was well above the estimate of -$38.7 billion.

Late last week, Federal Reserve chair-elect Janet Yellen testified before the powerful Senate Banking Committee. Yellen has been an ardent supporter of QE, and told the committee that the present level of asset purchases should continue until growth improves and unemployment falls. She said that the labor market and economy are performing “far short of their potential”, but added that she expects inflation to remain below the Fed’s target of 2%. Yellen, who is slated to become the first woman to head the Federal Reserve, will take over from Bernard Bernanke in January.

 

AUD/USD for Monday, November 18, 2013

Forex Rate Graph 21/1/13

AUD/USD November 18 at 13:20 GMT

AUD/USD 0.9398 H: 0.9419 L: 0.9359

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9119 0.9229 0.9305 0.9400 0.9508 0.9613

 

  • AUD/USD has edged higher in Monday trading. The pair pushed higher in the Asian session and touched a high of 0.9419 early in the European session.
  • On the upside, the pair is testing resistance at 0.9400. This is followed by stronger resistance at 0.9508.
  • AUD/USD pair is receiving support at 0.9305. This is followed by a support line 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, 0.9000 and 0.8926
  • Above: 0.9400, 0.9508, 0.9613 and 0.9700

 

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged in Monday trading. This is not reflected in the current movement of the pair, as the Australian dollar has started the week with gains against its US counterpart. The ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar continuing to move towards higher ground.

The Aussie has posted gains and is putting strong pressure on the 0.94 line. Will the upward trend continue? With no major releases out of the US on Monday, we could see the pair trade fairly close to the 0.94 line.

 

AUD/USD Fundamentals

  • 23:00 Australian CB Leading Index.
  • 6:00 FOMC Member Eric Rosengren Speaks.
  • 14:00 US TIC Long-Term Purchases. Estimate 21.3B.
  • 15:00 US NAHB Housing Market Index. Estimate 56 points.
  • 17:15 FOMC Member William Dudley Speaks.

 

*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.