AUD/USD – Shrugs Off Sharp New Home Sales

AUD/USD has posted slight losses in Monday trading, as the pair trades in the low-92 range. In economic news, Australian HIA New Home Sales posted its best numbers in three months. Private Sector Credit matched the forecast. In the US, today’s sole data release is Chicago PMI. As well, Federal Reserve chair Janet Yellen will speak at an event in Chicago.

Australian HIA New Home Sales started off the new week on a high note, as the indicator jumped 4.6% last month, a three-month high.  Private Sector Credit was unchanged, with a modest gain of 0.4%. The markets are keeping an eye on the Cash Rate, which will be released early on Tuesday. The RBA is expected to maintain rates at their current level of 2.5%.

RBA Governor Glenn Stevens gave an upbeat message on Wednesday and the Australian dollar responded with gains. Stevens said that the economy has improved thanks to the lower exchange rate since last April and improved global economic conditions. Stevens reiterated that low interest rates are unlikely to rise in 2014, as the RBA tries to boost consumer spending and residential construction.

US Unemployment Claims continued to impress last week. The key indicator dropped to 311 thousand, its lowest level in over three months. The estimate was 326 thousand, marking the fourth straight week that the reading has come in below the forecast. The news was not as good from Pending Home Sales, with a reading of -0.8%. This disappointed the markets, which had expected a small gain of 0.1%. Earlier in the week, New Home Sales also lost ground in February, and concern is bound to increase about the health of the US housing industry. Final GDP posted a gain of 2.6% in Q4, just shy of the estimate of 2.7%. This was lower than the Q3 gain, but is indicative of a growing economy.

Ukraine’s economy is in shambles as a result of the four-month political crisis which led to the ouster of the government and the Russian annexation of the Crimean region. Prime Minister Arseniy Yatsenyuk acknowledged that the country is on the edge of bankruptcy, and GDP could drop by as much as 3% this year. However, help is on the way. The IMF is set to sign a two-year loan of up to $18 billion, and the EU has offered a package of EUR 11 billion. Ukraine has already received two bailouts from the IMF since 2008, and will have to implement budget cuts and other measures in order to receive the new package from the IMF.

 

AUD/USD for Monday, March 31, 2014

Forex Rate Graph 21/1/13

AUD/USD March 31 at 14:15 GMT

AUD/USD 0.9232 H: 0.9259 L: 0.9218

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9000 0.9119 0.9229 0.9361 0.9446 0.9542

 

  • AUD/USD has posted modest losses on Monday.
  • The pair is testing support at 0.9229. There is stronger support at 0.9119.
  • 0.9361 is a strong resistance line.
  • Current range: 0.9229 to 0.9361

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000, 0.8893 and 0.8735
  • Above: 0.9361, 0.9466, 0.9542 and 0.9617

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Tuesday, continuing the trend we saw a day earlier. This is consistent with what we are seeing from the pair, as the Aussie has posted modest losses. AUD/USD ratio is almost split between long and short positions, reflecting a lack of trader bias as to what to expect from AUD/USD.

The Australian dollar is trading in the low-0.92 range, showing little movement in the European session.

 

AUD/USD Fundamentals

  • 00:00 Australian HIA New Home Sales. Actual 4.6%.
  • 00:30 Australian Private Sector Credit. Actual 0.4%.
  • 22:30 Australian AIG Manufacturing Index.
  • 13:45 US Chicago PMI. Estimate 59.2 points.
  • 13:55 US Federal Reserve Chair Janet Yellen 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.