AUD/USD: Aussie Closing in on 95 on Strong Chinese Data

The Australian dollar has posted gains on Tuesday, as the pair trades slightly below the 0.95 level early in the North American session. In economic news, the RBA maintained interest rate levels at 2.50%. The Aussie also received a boost from Chinese Final Manufacturing PMI, which posted its highest reading since December. In the US, the ISM Manufacturing PMI was almost unchanged last month.

The Australian dollar is sensitive to key Chinese data, as China is Australia’s number one trading partner. Chinese Final Manufacturing PMI moved above the 50-point level for the first time since December, pointing to expansion in the manufacturing sector. This follows the Chinese Flash Manufacturing PMI released last week, which also saw the indicator push above the 50-point level for the first time since November. The strong readings have helped boost the Aussie, as the currency trades close to the 0.95 line, its highest level since last November. Meanwhile, there were no surprises from the RBA, which held the course, maintaining the benchmark interest rate at 2.50%. The central bank has pegged the rate at this level since last August.

US Final GDP in Q1 was much worse than expected, but more recent US releases have been stronger, notably housing data and consumer confidence. The markets are keeping a close eye on Wednesday’s ADP Nonfarm Payrolls, which precedes the official Nonfarm Payrolls. The latter is one of the most important economic indicators, so the ADP release could be a harbinger of what to expect from Nonfarm Payrolls at the end of the week.

AUD/USD for Tuesday, July 1, 2014

AUD/USD July 1 at 14:20 GMT

AUD/USD 0.9484 H: 0.9413 L: 0.9494

AUD/USD Technical

• AUD/USD has posted gains in the Asian and European sessions. The US dollar remains under pressure in North American trading.
• 0.9446 has reverted to a support role as the Aussie trades at higher levels. There is stronger support at 0.9361.
• 0.9617 is a strong resistance line.

Further levels in both directions:

• Below: 0.9446, 0.9361, 0.9229 and 0.9119
• Above: 0.9617, 0.9757, 0.9847 and 1.00

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Tuesday, reversing the direction seen a day earlier. This is consistent with the movement of the pair, as the Australian dollar has moved higher. The ratio has a slight majority of short positions, indicative of slight trader bias towards the US dollar reversing directions and gaining ground against the Aussie.

AUD/USD Fundamentals

• 4:30 Australian Cash Rate. Estimate 2.50%. Actual 2.50%.
• 4:30 Australian Rate Statement.
• 6:30 Australian Commodity Prices. Actual -9.6%.
• 12:00 US Treasury Secretary Jack Lew Speaks.
• 13:45 US Final Manufacturing PMI. Estimate 57.5 points.
• 14:00 US ISM Manufacturing PMI. Estimate 55.6 points.
• 14:00 US Construction Spending. Estimate 0.5%.
• 14:00 US IBD/TIPP Economic Optimism. Estimate 48.9 points.
• 14:00 US ISM Manufacturing Prices. Estimate 60.0 points.
• All Day – US Total Vehicle Sales. Estimate 16.5M.

*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.