AUD/USD – Steady As US Posts Mixed Data

AUD/USD has edged higher in Tuesday trading, as the pair trades in the mid-0.91 range early in the North American session. On the release front, US numbers were a mix. Consumer Confidence sparkled, hitting a six-year high, but New Home Sales weakened in February and fell short of the estimate. In Australia, RBA Deputy Governor Philip Lowe speaks at two events in Sydney, and RBA Governor Glenn Stevens will speak in Hong Kong early on Wednesday.

US data was split on Tuesday. CB Consumer Confidence jumped to 82.3 points, easily surpassing the estimate of 78.7 points. This was the key indicator’s best showing since December 2007. An increase in consumer sentiment usually translates into consumer spending, which is a critical component of economic growth. The news wasn’t as good from the housing sector, as New Home Sales fell to 440 thousand, down sharply from the January release of 468 thousand. The reading was short of the estimate of 447 thousand. We’ll get a look at Pending Home Sales later in the week.

Last week’s FOMC meeting, the first with Janet Yellen as Fed chair, was dramatic. 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 US dollar was up sharply against the Australian currency.

World markets have until now managed to avoid much fallout from the Ukrainian crisis, although the situation remains very tense. Western countries are scrambling to respond to Russia’s lightning takeover of the Ukrainian region. The G-7 is holding an emergency meeting in the Hague, and it seems likely that more sanctions will be leveled against Russia. Meanwhile, Ukraine says it has ordered its troops in Crimea to withdraw to the mainland, which marks a tacit recognition of the Russian annexation of Crimea. The situation in Ukraine is the most severe crisis in East-West relations since the Cold War ended, and we’re likely to see further developments which could affect the markets.

AUD/USD for Tuesday, March 25, 2014

AUD/USD March 25 at 14:25 GMT

AUD/USD 0.9127 H: 0.9150 L: 0.9051

AUD/USD Technical

• AUD/USD is steady on Tuesday.
• The pair is testing support at 0.9119. There is stronger support at the key level of 0.9000.
• 0.9229 is providing strong resistance.
• Current range: 0.9119 to 0.9229

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 Tuesday, continuing the trend we saw at the start of the week. This is not consistent with what we are seeing from the pair, as the Aussie has edged higher. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias towards the Australian dollar pushing higher against the US currency.

The Australian dollar is steady in Tuesday trading. AUD/USD has edged higher European session.

AUD/USD Fundamentals

• 4:45 RBA Deputy Governor Philip Lowe Speaks.
• 13:00 US S&P/CS Composite-20 HPI. Estimate 13.3%. Actual 13.2%.
• 13:00 US HPI. Estimate 0.7%. Actual 0.5%.
• 13:59 US Richmond Manufacturing Index. Estimate -1 point. Actual -7 points.
• 14:00 US CB Consumer Confidence. Estimate 78.7 points. Actual 82.3 points.
• 14:00 US New Home Sales. Estimate 447K. Actual 440K.
• 22:30 RBA Deputy Governor Philip Lowe Speaks.
• 23:00 US FOMC Member Charles Plosser Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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