AUD/USD – Aussie Shrugs Off Dismal Building Approvals

AUD/USD is showing little movement on Wednesday, continuing the trend we’ve seen throughout the week. Early in the North American session, the pair is trading in the mid-0.92 range. In economic news, Australian Building Permits dropped sharply, slumping to an eight-month low. Australian AIG Services Index will be released later in the day. Over in the US, ADP Nonfarm Employment Change looked sharp, posting a strong gain in February.

The first US employment release of the week met high expectations, as ADP Nonfarm Payrolls jumped to 191 thousand, up from 139 thousand a month earlier. This practically matched the estimate of 192 thousand. The markets will get a good look at the US employment picture in the next few days, with Unemployment Claims, the Unemployment Rate and NFP still to come.

Australian Building Approvals looked awful, plunging by 5.0%, compared to a gain of 6.8% a month earlier. The estimate stood at -1.7%. The key indicator is notorious for strong fluctuations, which of often in estimates that are way off the mark. Meanwhile, 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.

Earlier in the week, Fed chair Janet Yellen said that inflation and employment levels needed to improve considerably, and the Federal Reserve would continue to provide monetary stimulus for some time. 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 Wednesday, April 2, 2014

Forex Rate Graph 21/1/13

AUD/USD April 2 at 14:00 GMT

AUD/USD 0.9249 H: 0.9364 L: 0.9223

 

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 higher on Wednesday. The pair touched a high of 0.9364 late in the European session.
  • 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 Wednesday, continuing the trend we saw a day earlier. This is not consistent with what we are seeing from the pair, as the Aussie has posted very slight gains. AUD/USD ratio is now evenly split between long and short positions, indicative of a lack of trader bias towards what direction AUD/USD will take.

The Australian dollar is trading in the low-0.92 range. The pair is steady early in the North American session.

 

AUD/USD Fundamentals

  • 00:30 Australian Building Approvals. Estimate -1.7%. Actual -5.0%.
  • 12:15 US ADP Nonfarm Employment Change. Estimate 192K. Actual 191K.
  • 14:00 US Factory Orders. Estimate 1.3%.
  • 14:30 US Crude Oil Inventories. Estimate 1.3M.
  • 22:30 Australian AIG Services 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.