AUD/USD: Aussie Flirts With 94 as US GDP Plummets

The Australian dollar has posted modest gains on Wednesday, as the pair trades slightly below the 0.94 line. On the release front, US numbers looked weak, as Final GDP dropped sharply and Core Durable Goods Orders softened in May. It’s a quiet day in Australia, with today’s sole release a speech from RBA Deputy Governor Philip Lowe in Melbourne.

Key Chinese releases often have an impact on the movement of AUD/USD, as China is Australia’s number one trading partner. On Monday, Chinese Flash Manufacturing PMI moved above the 50-point level for the first time since November, pointing to expansion in the manufacturing sector. The strong reading helped the Aussie move above the 0.94 line, but the currency surrendered those gains and then some on Tuesday. With no economic data coming out of Australia for the entire week, much of the Aussie’s movement could depend on this week’s Chinese and US data.

US indicators pointed downwards on Wednesday, led by a dismal Final GDP reading in Q1. The markets were braced for a decline of 1.8%, but the key indicator shocked with a much sharper drop of 2.9%. There was more bad news to follow, as Core Durable Goods Orders declined by 0.1%, its first decline in five months. The estimate stood at 0.3%. Durable Goods Orders looked even worse, coming in at -1.0%, shy of the estimate of -0.1%. Traders should be prepared for the US dollar’s rivals to gain ground after the weak GDP release.

On Tuesday, US numbers impressed the markets, as consumer confidence and housing indicators moved higher. CB Consumer Confidence improved to 85.2 points, beating the estimate of 83.6 points. It was the strongest level since December 2007. New Home Sales had a superb reading, jumping to 504 thousand, crushing the estimate of 442 thousand. It was the key indicator’s best showing since August 2008.

 

AUD/USD for Wednesday, June 25, 2014

AUD/USD June 25 at 13:10 GMT

AUD/USD 0.9387 H: 0.9498 L: 0.9354

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9119 0.9229 0.9361 0.9446 0.9617 0.9757

 

  • AUD/USD had a quiet Asian session and moved higher late in European trading. The pair is steady early in the North American session.
  • 0.9361 remains an immediate support line. There is stronger support at 0.9229, which has held firm since early June.
  • 0.9446 is the next resistance line. 0.9617 is stronger.

Further levels in both directions:

  • Below: 0.9361, 0.9229, 0.9119 and 0.9000
  • Above: 0.9446, 0.9617, 0.9757 and 0.9847

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Wednesday, continuing the trend which has marked the ratio all week. This is consistent with the movement of the pair, as the Australian dollar has posted gains. The ratio currently has a majority of long positions, pointing to trader bias towards AUD/USD moving higher.

 

AUD/USD Fundamentals

  • 3:00 RBA Deputy Governor Philip Lowe Speaks.
  • 12:30 US Core Durable Goods Orders. Estimate +0.3%. Actual -0.1%.
  • 12:30 US Final GDP. Estimate -1.8%. Actual -2.9%.
  • 12:30 US Durable Goods Orders. Estimate -0.1%. Actual -1.0%.
  • 12:30 US Final GDP Price Index. Estimate 1.3%. Actual 1.3%.
  • 13:45 US Flash Services PMI. Estimate 58.6 points. Actual 61.2 points.
  • 14:30 US Crude Oil Inventories. Estimate -1.2M.

*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.