AUD/USD – Aussie Dips Despite Strong Australian Housing Data

AUD/USD has edged lower on Tuesday, as the pair has dipped below the 0.94 line. On the release front, HIA New Home Sales posted a strong gain of 1.2% last month. In the US, CB Consumer Confidence stunned the markets, pushing above the 90 level for the first time since late 2007.

If CB Consumer Confidence is any indication, the US consumer is brimming with optimism about the economy. The key indicator jumped to 90.9 points, crushing the estimate of 85.5 points. This was the indicator’s highest level since September 2007. Consumer confidence is closely tracked by analysts since a confident consumer is likely to increase consumption, which is critical for economic growth. Meanwhile, traders can expect stronger currency movement on Wednesday, with three key events on the calendar. The Federal Reserve will release a policy statement and we’ll get a look at Advance GDP and the ADP Nonfarm Payrolls. If these releases surprise the markets, we could see increased activity from AUD/USD.

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. As well, the occasional jab from the RBA of an overvalued Aussie  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 from either release could shake up AUD/USD.

 

AUD/USD for Tuesday, July 29, 2014

AUD/USD July 29 at 14:00 GMT

AUD/USD 0.9385 H: 0.9416 L: 0.9379

 

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 in the Asian and European sessions. The pair is unchanged in North American trading.
  • On the downside, 0.9361 is under pressure. 0.9229 is stronger.
  • 0.9446 is the next resistance line. 0.9617 follows.

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 Tuesday. This is not consistent with the movement of the pair, as the Australian dollar has posted losses. The ratio remains 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

  • 1:00 Australian HIA New Home Sales. Actual 1.2%.
  • 13:00 US S&P/CS Composite-20 HPI. Estimate 9.8%. Actual 9.3%.
  • 14:00 US CB Consumer Confidence. Estimate 85.5 points. Actual 90.9 points.

* 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.