AUD/USD – Sharp Losses After RBA Minutes

AUD/USD took a sharp turn southwards on Tuesday, as the pair has dropped to the mid-0.92 range. The Aussie lost ground following the release of the RBA minutes, as the central bank said that it had planned to maintain interest rates at their current low levels. On the release front, CB Leading Index dropped to a seven-month low. Later in the day, RBA Assistant Governor Guy Debelle speaks at an event in Adelaide. It’s another quiet day in the US, with no economic indicators on the schedule.

The RBA minutes were released on Tuesday, and the central bank said that it plans to keep interest rate levels at the current low levels of 2.50% for the foreseeable future, due to projections of weak growth from the economy. With inflation at low levels and the government having just delivered an austerity budget, the RBA said it has no plans to alter its accommodative monetary stance. Unlike recent policy statements, the RBA did not comment on the high value of the Australian dollar. In the past, the RBA has not hesitated to point a finger at the Aussie, saying it has weighed on the economic recovery.

In the US, last week ended with encouraging housing numbers. Building Permits jumped to 1.08 million, well above the estimate of 1.01 million. This was the highest level we’ve seen since December 2006. Housing Starts continues to move higher and climbed to 1.07M, compared to the estimate of 0.98M. This marked a five-month high. Meanwhile, UoM Consumer Sentiment dipped to 81.8 points, short of the estimate of 84.7 points.

 

AUD/USD for Tuesday, May 20, 2014

Forex Rate Graph 21/1/13

AUD/USD May 20 at 13:45 GMT

AUD/USD 0.9258 H: 0.9336 L: 0.9251

 

AUD/USD Technical

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

 

  • AUD/USD has lost ground in Tuesday trade. The pair dropped below the 0.93 line in the Asian session.
  • On the downside, 0.9229 is providing weak support as the Aussie trades at lower levels. This is followed by stronger support at 0.9119.
  • On the upside, 0.9361 is a strong line of resistance.

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000 and 0.8893
  • Above: 0.9361, 0.9446, 0.9542 and 0.9617

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions in Tuesday trading. This is not consistent with the movement from the pair, as the Aussie has suffered sharp losses. The ratio has a slight majority of long positions, indicative of trader bias towards the Australian dollar rebounding and moving upwards.

AUD/USD has lost ground in Tuesday trading. The Aussie is under pressure early in the North American session.

 

AUD/USD Fundamentals

  • 00:00 Australian CB Leading Index. Actual 0.0%.
  • 1:30 RBA Monetary Policy Meeting Minutes.
  • 3:15 RBA Assistant Governor Guy Debelle Speaks.
  • 16:30 FOMC Member Charles Plesser Speaks.
  • 17:00 FOMC Member William Dudley 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.