AUD/USD – Aussie Loses Ground As Building Permits Slides

AUD/USD has kicked off the new trading week with losses, as the pair trades in the mid-0.92 range in Monday’s European session. The Aussie lost ground following another bad outing from Australian Building Permits. There was better news from Company Operating Profits, which posted a strong gain in May. In the US, today’s highlight is ISM Manufacturing PMI. The index has been steadily moving higher throughout 2014, and the upward trend is expected to continue in the May release.

Australian Building Permits, a key indicator, continues to have trouble, having now posted three straight declines. The indicator came in at -5.6%, nowhere near the estimate of +2.1%. AIG Manufacturing Index jumped in May, but still fell shy of the 50-point level, coming in at 49.2 points. The index has not been above the 50-point level since September, pointing to ongoing contraction in the construction sector. Company Operating Profits looked good, posting a strong gain of 3.1%, beating the estimate of 2.6%. Early on Tuesday, we’ll get a look at Australian Retail Sales and the Cash Rate.

Key numbers out of the US were mostly a disappointment last week. Preliminary GDP, the primary gauge of economic activity, posted its first decline since Q2 of 2009. The indicator came in at -1.0% for Q1, worse than the estimate of -0.6%. Harsh winter conditions took their toll on the US economy in Q1, and analysts expect a rebound in Q2. After a strong gain in March, Pending Home Sales softened, coming in at 0.4%. This was nowhere near the gain of 1.1%. On a brighter note, Employment Claims dropped to 300 thousand, easily beating the estimate of 321 thousand.

 

AUD/USD for Monday, June 2, 2014

AUD/USD June 2 at 12:30 GMT

AUD/USD 0.9247 H: 0.9308 L: 0.9243

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9000 0.9119 0.9229 0.9361 0.9446 0.9617

 

  • AUD has posted losses on Monday. The pair dropped below the 0.93 line in the Asian session.
  • 0.9229 has weakened in support as the pair trades at lower levels. This is followed by support at 0.9119.
  • 0.9361 is a strong line of resistance.

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000, 0.8893 and 0.8757
  • Above: 0.9361, 0.9446 and 0.9617 and 0.9757

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions in Monday trading. This is not consistent with the movement of the pair, as the Aussie has lost ground. The ratio currently has a majority of long positions, indicative of a trader bias towards the Australian dollar reversing direction and moving upwards.

AUD/USD has lost ground on Monday. The pair has edged lower in the European session.

 

AUD/USD Fundamentals

  • 00:30 Australian MI Inflation Gauge. Estimate 0.3%.
  • 1:30 Australian Building Approvals. Estimate +2.1%. Actual -5.6%.
  • 1:30 Australian Company Operating Profits. Estimate 2.6%. Actual 3.1%.
  • 6:30 Australian Commodity Prices. Actual -12.8%.
  • 12:40 US Treasury Secretary Jack Lew Speaks.
  • 13:45 US Final Manufacturing PMI. Estimate 56.2 points.
  • 14:00 US ISM Manufacturing PMI. Estimate 55.7 points.
  • 14:00 US Construction Spending. Estimate 0.8%.
  • 14:00 US ISM Manufacturing Prices. Estimate 56.8 points.

*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.