AUD/USD – Under Pressure After Weak Aussie Numbers

AUD/USD has edged lower on Wednesday, as the pair trades in the mid-0.89 range in the European session. In economic news, Australian Westpac Consumer Sentiment and Home Loans posted weak readings. Over in the US, there are no major releases on the schedule. Today’s highlight is Crude Oil Inventories.

Australian numbers continue to disappoint. Westpac Consumer Sentiment continues to sag, posting a decline of 0.7% in February. This was the fifth decline in six releases. Home Loans, which is an important gauge of the housing industry as well as consumer spending, came in with a flat of 0.0%. This was an improvement compared to the previous release, but fell well short of the estimate of 0.8%. We’ll get a look at Employment Change, a key indicator, early on Thursday.

With the US posting solid Unemployment Claims and Nonfarm Payrolls late last week, the markets can breathe more comfortably as the Fed is likely to take its scissors and trim QE next week for the third time. New York Fed President William Dudley stated last week that the threshold to alter the Fed’s program to wind up QE was “pretty high”. In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue.

AUD/USD for Wednesday, March 12, 2014

AUD/USD March 12 at 13:00 GMT

AUD/USD 0.8950 H: 0.8970 L: 0.8924

AUD/USD Technical

• AUD/USD has edged lower in Wednesday trading. The pair touched a low of 0.8924 early in the European session.
• On the upside, the key line of 0.90 has switched to a resistance role. This is followed by 0.9119.
• 0.8893 is providing support. There is stronger support at 0.8735, which has held firm since early February.
• Current range: 0.8893 to 0.9000

Further levels in both directions:

• Below: 0.8893, 0.8735, 0.8658 and 0.8565
• Above: 0.9000, 0.9119, 0.9229, 0.9361 and 0.9466

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Wednesday, continuing the trend we saw a day earlier. This is not consistent with what we are seeing from the pair, as the Aussie is down slightly. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias towards the Australian dollar moving higher against the US currency.

The Australian dollar is under pressure, as the pair remains below the 0.90 level. AUD/USD is steady in the European session.

AUD/USD Fundamentals

• 00:30 Australian Home Loans. Estimate 0.8%. Actual 0.0%.
• 14:30 US Crude Oil Inventories. Estimate 2.1M.
• 17:01 US 10-year Bond Auction.
• 18:00 US Treasury Secretary Jack Lew Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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