AUD/USD – Little Movement Ahead of Key US Numbers

The Australian dollar is showing little movement on Wednesday, as AUD/USD trades in the low-0.87 line in the European session. In economic news, Australian New Motor Vehicle Sales posted a strong gain of 2.9%. In the US, we’ll get a look at US releases after a quiet start to the week. There are three key events on the calendar – Retail Sales, Core Retail Sales and PPI.

There was good news out of Australia on Wednesday, as New Motor Vehicle Sales posted an excellent gain of 2.9% in September. This snapped two straight declines and was the indicator’s best showing since June 2013. Earlier in the week, NAB Business Confidence fell to 5 points in September. This was the key indicator’s weakest showing since March. However, Westpac Consumer Sentiment bounced back nicely with a strong gain of 0.9%.

US markets were off on Monday for a holiday, so there’s been little action on the release front so far this week. That could change later on Wednesday, as the US releases key consumer spending and inflation data. The markets are keeping low expectations, so traders should be prepared for some movement from the pair if there are some unexpected readings from Wednesday’s releases.

When will the Federal Reserve decide to raise interest rates? There was an interesting development last week, as the FOMC minutes were unexpectedly dovish. In the minutes, the Fed poured some cold water on rising expectations of a rate hike, as a number of policymakers said that the Federal Reserve should take a more data-dependent approach regarding a rate hike. The Fed also voiced concern about the rising strength of the US dollar which could weigh on the recovery. On the weekend, FOMC member Stanley Fischer said that the Fed could slow tightening if global growth is weaker than expected. Strong US numbers have raised expectations about a rate hike, but clearly the Fed is taking a cautious approach regarding the timing of a rate hike. Still, with QE set to wind up by the end of the month, rising speculation about higher rates bodes well for the US dollar.

AUD/USD for Wednesday, October 15, 2014

AUD/USD October 15 at 9:50 GMT

AUD/USD 0.8714 H: 0.8750 L: 0.8676

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8456 0.8550 0.8668 0.8763 0.8820 0.8953

 

  • AUD/USD had a busy Asian session, edging lower and then reversing directions and posting strong gains. The pair has edged lower in European trade.
  • On the upside, 0.8763 remains an immediate resistance line. 0.8220 is stronger.
  • 0.8668 is providing support.
  • Current range: 0.8668 to 0.8763

Further levels in both directions:

  • Below: 0.8668, 0.8550, 0.8456 and 0.8315
  • Above: 0.8763, 0.8820, 0.8953, 0.9020 and 0.9119

 

OANDA’s Open Positions Ratio

AUD/USD ratio is almost unchanged on Wednesday. This is consistent with the lack of movement displayed by the pair. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD breaking out of range and climbing to higher ground.

 

AUD/USD Fundamentals

  • 00:30 Australian New Motor Vehicle Sales. Actual 2.9%.
  • 12:30 US Core Retail Sales. Estimate 0.2%.
  • 12:30 US PPI. Estimate 0.1%.
  • 12:30 US Retail Sales. Estimate -0.1%.
  • 12:30 US Core PPI. Estimate 0.1%.
  • 12:30 US Empire State Manufacturing Index. Estimate 20.3 points.
  • 14:00 US Business Inventories. Estimate 0.4%.
  • 18:00 US Beige Book.
  • 18:00 US Federal Budget Balance. Estimate 82.3B.

* 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.