AUD/USD – Aussie Gains Continue on Solid CPI

AUD/USD has posted gains on Wednesday, as the pair has pushed above the mid-0.94 range. On the release front, Australian CPI and Trimmed Mean CPI matched expectations in Q2. In the US, today’s sole event is Crude Oil Inventories. On Tuesday, US data was a mix. CPI posted a weak gain as the key inflation index continues to struggle. Meanwhile, there was excellent news on the housing front, as Existing Home Sales exceeded expectations and hit its highest level in eight months.

US numbers were a mix on Tuesday. Inflation numbers continue to struggle, as Core CPI posted a paltry gain of 0.1%, shy of the estimate of 0.2%. The key index has looked anemic in 2014, with its highest gain this year at just 0.3%. CPI was bit stronger, as it gained 0.3% last month, matching the forecast. Meanwhile, Existing Home Sales jumped to 5.04 million, surpassing the estimate of 4.94 million. This was the best showing we’ve seen since October, and follows a disappointing release from Housing Starts, which was published last week.

The Australian dollar continues to trade at high levels  and received a boost on Wednesday as CPI posted a gain of 0.5% in Q2, matching the estimate. However, there is room for concern as CPI gains continue to decrease, dating back to Q3 of 2013, when the index jumped 1.2%. There was good news from Trimmed CPI, which excludes volatile items that are included in CPI. The index posted a strong gain of 0.8% in Q2, also matching the forecast.

 

AUD/USD for Wednesday, July 23, 2014

AUD/USD July 23 at 13:05 GMT

AUD/USD 0.9446 H: 0.9454 L: 0.9381

 

AUD/USD Technical

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

 

  • AUD/USD posted gains in the Asian session and pushed into 0.94 territory. The pair is unchanged in the European session.
  • 0.9361 continues to provide strong support for the pair. There is stronger support at 0.9229.
  • 0.9446 is fluid and could see further action during the North American session. This is followed by strong 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 on Wednesday, continuing the trend seen a day earlier. This is not consistent with the movement of the pair, as the Australian dollar continues to post gains. The ratio has reverted back to a majority of short positions, indicative of trader bias towards the US dollar reversing course and moving to higher ground.

 

AUD/USD Fundamentals

  • 1:30 Australian CPI. Estimate 0.5%. Actual 0.5%.
  • 1:30 Australian Trimmed Mean CPI. Estimate 0.8%. Actual 0.8%.
  • 14:30 US Crude Oil Inventories. Estimate -2.1M.

* 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.