AUD/USD – Steady After RBA Minutes

AUD/USD is showing little movement on Tuesday, as the pair trades at the 0.90 line. The RBA released its minutes, which indicated that the central bank plans to keep interest rates at low levels. Later on Tuesday, Australia releases MI Leading Index. In the US, there are two major events on the schedule – Core CPI and Building Permits.

The RBA published its minutes of its most recent policy meeting on Tuesday. The central bank has kept interest rates at 2.50% since July, and the minutes indicated that this level will be maintained. The RBA said that the record-low rate was boosting growth. As for currency levels, the RBA noted that the drop in the Aussie had helped the economy achieve balanced growth, but added that the “exchange rate remained high by historical standards”.

Events are moving quickly in the Ukrainian crisis. Voters in Crimea voted overwhelmingly to join Russia in Sunday’s referendum, and Russian President Putin has recognized Crimea as an independent state, paving the way for annexation. Putin addressed a special session of the Russian parliament on Tuesday. The EU and US have responded with targeted sanctions, freezing assets of several high-ranking Russian officials. Additional sanctions are expected, possibly as early as this week.

US releases looked weak on Friday. PPI posted a decline for the first time since November, coming in at -0.1%. The estimate stood at +0.2%. Preliminary UoM Consumer Sentiment dropped below the 80-point level for the first time since November, slipping to 79.9 points. This was short of the estimate of 81.9 points. The weak PPI points to persistently low inflation numbers, which is indicative of an underperforming economy. Recent US numbers have certainly not dazzled, but they should be strong enough for the Federal Reserve to go ahead with another taper of QE. This would be the third trim of the Fed’s asset-buying scheme, and would reduce QE to $55 billion per month. These tapers are dollar-positive and mark a vote of confidence in the US economy by the Federal Reserve.

 

AUD/USD for Tuesday, March 18, 2014

Forex Rate Graph 21/1/13

AUD/USD March 18 at 12:20 GMT

AUD/USD 0.9099 H: 0.9110 L: 0.9064

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8735 0.8893 0.9000 0.9119 0.9229 0.9361

 

  • AUD/USD is trading close to the 0.91 line.
  • 0.9000 continues to provide strong support. This is followed by support at 0.8893.
  • 0.9119 is the first line of resistance. This is a weak line and could be tested during the day. There is stronger resistance at 0.9229.
  • Current range: 0.9000 to 0.9119

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

AUD/USD ratio has reversed directions in Tuesday, pointing to gains in long positions. This is consistent with what we are seeing from the pair, as the Aussie has posted very slight gains against the US dollar. 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 trading close to the 0.91 line. AUD/USD has edged higher in the European session.

 

AUD/USD Fundamentals

  • 00:30 RBA Monetary Policy Meeting Minutes.
  • 12:30 US Building Permits. Estimate 0.97M.
  • 12:30 US Core CPI. Estimate 0.1%.
  • 12:30 US CPI. Estimate 0.1%.
  • 12:30 US Housing Starts. Estimate 0.92M.
  • 13:00 US TIC Long-Term Purchases. Estimate 23.4B.
  • 23:30 Australian MI Leading 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.