AUD/USD – Aussie Unable to Hold Onto Gains After RBA Rate Decision

AUD/USD has edged lower in Tuesday trading, as the pair trades in the mid-92 range late in the European session. In economic news, the RBA held interest rates at 2.50%. In the US, today’s highlight is ISM Manufacturing PMI.

As expected, the RBA maintained the benchmark interest rate at 2.50%, where it has been pegged since last August. RBA Governor Glenn Stevens took a swipe at the Aussie, saying that the high value of the currency in the past few months was not good for economic growth. After the rate decision, the Australian dollar briefly pushed above the 0.93 line, its highest level in four months. Last week, Stevens said that interest rates are unlikely to rise in 2014, as the RBA tries to boost consumer spending and residential construction. On the release front, 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.

On Monday, Fed chair Janet Yellen said that “considerable slack” remained in the US economy and this would require further stimulus measures. Currently, the Fed is purchasing $55 billion in assets under its QE scheme. There have been three tapers to QE so far, and Yellen plans to wind up the program in the fall, provided that the US economy does not run into any serious turbulence. At the same time, the Federal Reserve has stated that it has no plans to raise interest rates until sometime in 2015.

 

AUD/USD for Tuesday, April 1, 2014

Forex Rate Graph 21/1/13

AUD/USD April 1 at 14:50 GMT

AUD/USD 0.9239 H: 0.9302 L: 0.9230

 

AUD/USD Technical

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

 

  • AUD/USD has edged lower on Tuesday. The pair touched a high of 0.9302 late in the Asian session but was unable to hold these gains.
  • There is weak support at 0.9229. This line could be tested if the Australian dollar loses more ground. 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 has a majority of long positions, indicative of trader bias towards AUD/USD reversing directions and moving upwards.

The Australian dollar is trading in the low-0.92 range. The pair has edged lower in the European session.

 

AUD/USD Fundamentals

  • 3:30 RBA Cash Rate. Estimate 2.50%. Actual 2.50%.
  • 3:30 RBA Rate Statement.
  • 5:30 Australian Commodity Prices. Actual -12.8%.
  • 13:45 US Final Manufacturing PMI. Estimate 55.9 points.
  • 14:00 US ISM Manufacturing PMI. Estimate 54.2 points.
  • 14:00 US Construction Spending. Estimate 0.2%.
  • 14:00 US IBD/TIPP Economic Optimism. Estimate 46.3 points.
  • 14:00 US ISM Manufacturing Prices. Estimate 59.2 points.
  • All Day – US Total Vehicle Sales. Estimate 15.8M.

*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.