AUD/USD – Aussie Moves Up on Mixed US Durables

AUD/USD has gained ground on Tuesday, as the pair trades in the low-0.93 range in the North American session. On the release front, Core Durable Goods declined by 0.8%, but Durable Goods Orders set a monthly record with a huge jump of 22.6%. CB Consumer Confidence was excellent, climbing to 92.4 points. There are no Australian releases on Tuesday.

US durables painted a mixed picture on Tuesday. Core Durable Goods Orders, a key indicator, came in at -0.8%, its worst showing in 2014. This was nowhere near the estimate of +0.5%. At the same time, Durable Goods Orders stunned the markets with a record gain of 22.6%. The reason? A huge increase in the purchase of passenger planes in July. The greenback didn’t get any help from the mixed durables data, losing ground to the Aussie.

Financial leaders and central bankers met at Jackson Hole for a conference, and the markets were all ears as Fed chair Janet Yellen delivered the keynote address on Friday. Any hopes for some dramatic news were dashed, as Yellen did not provide any clues as to the timing of a rate hike. She reiterated that the US job market still needed to improve, so employment numbers remain a crucial factor in any rate move by the Fed. There is a divergence in monetary stance between the ECB and the Fed, as the Fed is winding up QE, while the ECB may be forced to provide stimulus to prop up the sagging Eurozone economy.

RBA Governor Glenn Stevens testified before parliament last week, and delivered a rather downbeat message. Stevens said that in the present economic environment, the economy needed an injection of confidence rather than lower interest rates. Stevens also warned that the risk of the Australian dollar dropping to lower levels was “underestimated”. His comments followed the RBA minutes, which were also somewhat pessimistic. Policymakers stated there was a “significant degree of uncertainty” in the economic outlook, and therefore a rate decrease is unlikely. If the message to the markets continues to pessimistic, the Aussie could lose ground.

 

AUD/USD for Tuesday, August 26, 2014

AUD/USD August 26 at 15:25 GMT

AUD/USD 0.9318 H: 0.9331 0.9272

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9020 0.9119 0.9229 0.9361 0.9446 0.9617

 

  • AUD/USD lost ground in the Asian session, touching a low of 0.9272. The pair then recovered, moving upwards in the European session. AUD/USD is stable in North American trade.
  • 0.9229 is providing strong support.
  • 0.9361 is an immediate resistance line. 0.9446 is stronger.
  • Current range: 0.9229 to 0.9361

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9020 and 0.8916
  • Above: 0.9361, 0.9446, 0.9617 and 0.9757

 

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Tuesday, continuing the trend seen a day earlier. This is not consistent with the movement of the pair, as the Australian dollar has shown some strength. The ratio has a majority of long positions, indicative of trader bias towards the Australian dollar continuing to move to higher ground.

 

AUD/USD Fundamentals

  • 12:30 US Core Durable Goods Orders. Estimate +0.5%. Actual -0.8%.
  • 12:30 US Durable Goods Orders. Estimate 7.4%. Actual 22.6%.
  • 13:00 US HPI. Estimate 0.3%. Actual 0.4%
  • 13:00 US S&P/CS Composite-20 HPI. Estimate 8.2%. Actual 8.1%.
  • 14:00 US CB Consumer Confidence. Estimate 89.1 points. Actual 92.4 points.
  • 14:00 US Richmond Manufacturing Index. Estimate 8 points. Actual 12 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.