AUD/USD – Improving Aussie Pushes Above 91

The Australian dollar continues to point upwards, and is trading in the low-0.91 range on Monday. It’s a quiet day on the release front, as we start the new trading week. Over in the US, there is just one release on the schedule, Flash Manufacturing PMI. In Australia, there are no releases on Monday. Early on Tuesday, RBA Deputy Governor Philip Lowe will deliver remarks at an event in Sydney.

The US dollar surged against its major rivals following the Federal Reserve’s policy meeting on Wednesday, the first meeting headed by Janet Yellen. The decision to trim QE by another $10 billion was widely expected, but her comments at the follow-up press conference gave the dollar a big boost against its major rivals. Yellen said that the Fed was on track to wind up QE in the fall, and could start to raise interest rates six months later. This is a more aggressive approach towards higher rates than the markets had expected, and the dollar responded by posting strong against the yen.

The Ukrainian crisis is deepening. Russian President Vladimir Putin signed a deal on Friday which formally annexed Crimea to Russia, while Western countries are scrambling to respond to Russia’s lightning takeover of the Ukrainian region. The commander of U.S. and NATO forces in Europe said that Russia had assembled a large force on Ukraine’s eastern border and could attack at any time. Meanwhile, Ukraine says it has ordered its troops in Crimea to withdraw to the mainland, in order to de-escalate the extremely tense situation. The troop withdrawal marks a tacit recognition of the Russian annexation of Crimea.

 

AUD/USD for Monday, March 24, 2014

Forex Rate Graph 21/1/13

AUD/USD March 24 at 13:05 GMT

AUD/USD 0.9124 H: 0.9126 L: 0.9051

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8893 0.9000 0.9119 0.9229 0.9361 0.9466

 

  • AUD/USD has steadied on Thursday, following sharp losses a day earlier.
  • On the downside, 0.9000 has weakened and was briefly breached in the European session. This line could be tested again during the day. Next there is support at 0.8893.
  • 0.9119 is the first line of resistance. This line has some breathing room as the US dollar has moved sharply higher. There is stronger resistance at 0.9229.
  • Current range: 0.9000 to 0.9119

Further levels in both directions:

  • Below: 0.9119, 0.9000, 0.8893, 0.8735, 0.8658
  • Above: 0.9229, 0.9361, 0.9466 and 0.9542

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Monday. This is not consistent with what we are seeing from the pair, as the Aussie has posted 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 continuing to rally against the US currency.

The Australian dollar is moving higher and has gained about 100 points in the past week. The US dollar remains under pressure late in the European session.

 

AUD/USD Fundamentals

  • 13:45 US Flash Manufacturing PMI. Estimate 56.6 points.
  • All Day – G7 Meetings.

*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.