AUD/USD – Stable Ahead of US Housing Data

AUD/USD has posted slight gains on Monday, as the pair trades slightly above the 0.94 line late in the European session. Today’s highlight is US Pending Home Sales, with the markets braced for a decline in the June release. There are no Australian releases on Monday.

The Australian dollar often takes its riders on roller coaster rides, but AUD/USD has been unusually subdued, with little movement since early June. Strong US numbers have not translated into gains for the US dollar, as the Aussie continues to trade at high levels and the occasional jab from the RBA that the Aussie is overvalued has failed to push the currency to lower levels. This week’s key events out of Australia are Building Approvals and PPI, and unexpected readings could shake up AUD/USD.

The US ended the week on a high note, courtesy of strong data from the manufacturing sector. Core Durable Goods Orders jumped 0.8%, beating the estimate of 0.6%, and rebounding nicely from a decline of 0.1% in May. Durable Goods Orders followed suit, posting a gain of 0.7%, compared to a weak reading of -1.0% last month. This easily surpassed the estimate of 0.4%. Unemployment Claims tumbled last week, as the key indicator fell to 284 thousand, its lowest level since February 2008. This surprised the markets, which had expected a reading of 310 thousand. The strong release continues a string of solid employment data, which has helped the dollar. As well, positive news on the employment front is bound to increase speculation about a rate increase by the Federal Reserve.

 

AUD/USD for Monday, July 28, 2014

AUD/USD July 28 at 12:30 GMT

AUD/USD 0.9410 H: 0.9414 L: 0.9385

 

AUD/USD Technical

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

 

  • AUD/USD dipped lower in the Asian session, but reversed directions in the European session, moving above the 0.94 line.
  • 0.9361 is providing support.
  • 0.9446 is an immediate resistance line. 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 long positions on Monday. This is consistent with the movement of the pair, as the Australian dollar has posted small gains. The ratio is almost evenly split between open long and short positions, indicative of a lack of trader bias as to what direction the pair will take.

 

AUD/USD Fundamentals

  • 13:45 US Flash Services PMI. Estimate 62.3 points.
  • 14:00 US Pending Home Sales. Estimate -0.2%.

* 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.