AUD/USD: Steady After RBA Minutes

AUD/USD has edged lower on Tuesday, as the pair trades in the high-0.93 range late in the European session. On the release front, the RBA minutes took a swipe at the high value of the Australian dollar. Australian New Motor Vehicle Sales jumped 1.7% last month, its best reading in 2014. In the US, retail sales numbers were shy of the estimates. As well, Federal Reserve chair Janet Yellen will begin two days of testimony on Capitol Hill.

The RBA released the minutes of its last policy meeting on Tuesday. The minutes stated that the exchange rate “remained high by historical standards” and was hampering attempts to achieve balanced growth in the economy. The RBA has sent out this message before, but the Aussie has been able to recover from any losses which occurred following such statements from the central bank.

Australian employment data was a mix in June. Employment Change rebounded in June with a strong gain of 15.9 thousand, easily beating the estimate of 12.3 thousand. At the same time, Unemployment Rate rose to 6.0%, the highest level seen since February. This edged above the estimate of 5.9%. Meanwhile, consumer and business confidence levels, both of which are important catalysts for economic growth, looked solid. NAB Business Confidence hit its highest level since January, while Westpac Consumer Confidence gained 1.9%, an eight-month high.

Janet Yellen visits Capitol Hill this week, starting with testimony on Tuesday before the Senate Banking Committee. The Federal Reserve minutes, released last week, did not shed much light on when the Fed plans to raise interest rates, but policymakers did agree to wind up the QE scheme by October. The asset purchase program flooded the economy with over $2 trillion, and the Fed has been steadily reducing the program since last December. Winding down QE, which currently stands at $45 billion/month, will require several more tapers by the Fed, but that shouldn’t pose a problem, as the US economy continues to improve. The markets will be closely following Yellen’s remarks, looking for clues regarding the timing of a rate hike.

 

AUD/USD for Tuesday, July 15, 2014

AUD/USD July 15 at 13:15 GMT

AUD/USD 0.9393 H: 0.9403 L: 0.9382

 

AUD/USD Technical

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

 

  • AUD/USD edged lower late in the Asian session. The pair is steady in European trading.
  • 0.9361 continues to provide weak support. There is stronger support at 0.9229.
  • 0.9446 is the next resistance line. This is followed by resistance at 0.9617.

Further levels in both directions:

  • Below: 0.9361, 0.9229, 0.9119 and 0.9000
  • Above: 0.9446, 0.9617, 0.9757 and 0.9842

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions in Tuesday trade. This is consistent with the movement of the pair, as the Australian dollar has edged lower. The ratio remains almost evenly split between long and short positions, indicative of a lack of trader bias towards where the Australian dollar is headed.

 

AUD/USD Fundamentals

  •  1:30 RBA Monetary Policy Meeting Minutes.
  • 1:30 Australian New Motor Vehicle Sales.
  • 12:30 US Core Retail Sales. Estimate 0.5%. Actual 0.4%.
  • 12:30 US Retail Sales. Estimate 0.6%. Actual 0.2%.
  • 12:30 US Empire State Manufacturing Index. Estimate 17.2 points.
  • 12:30 US Import Prices. Estimate 0.5%.
  • 14:00 US Federal Reserve Chair Janet Yellen Testifies Before Senate Banking Committee.
  • 14:00 US Business Inventories. Estimate 0.6%.

* 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.