AUD/USD – Listless as Markets Await US Housing Data

It’s been an uneventful week for AUD/USD, and this trend continues on Friday, as the pair trades in the mid-0.87-range in the North American session. In economic news, the sole US release on the schedule is New Home Sales. The markets are expecting the indicator to soften this month, with an estimate of 473 thousand. There are no Australian releases on Friday.

In the US, jobless claims were softer than expected. Unemployment Claims rose to 284 thousand last week, much higher than the previous reading of 264 thousand, and above the estimate of 269 thousand. However, the markets were not too concerned, as the four-week average, which is less volatile than the weekly release, dipped to 281,000, a 14-year low. Meanwhile, weak inflation levels continue to point to slack in the economy. On Wednesday, this trend continued with soft consumer inflation numbers. CPI rose to +0.1%, an improvement from the previous reading of -0.2%. The estimate stood at 0.0%, so the markets clearly did not have high expectations. It was a similar story from Core CPI, which also posted a 0.1% gain, up from 0.0% a month earlier. This was shy of the forecast of 0.2% but still within expectations.

Down under, Australian Business Confidence remained steady, as the key indicator posted a reading of 6 points for the third straight quarter. The Aussie initially improved after the release, climbing above the 0.88 line. However, the currency reversed directions and gave up these gains. Earlier in the week, the RBA released the minutes of its last policy meeting. Predictably, the RBA took a shot at the high value of the Australian dollar, with the central bank saying that the currency was still weighing on the economy. However, the minutes noted that Australian growth continued to be “moderate”.

AUD/USD for Friday, October 24, 2014

AUD/USD October 24 at 10:30 GMT

AUD/USD 0.8777 H: 0.8784 L: 0.8720

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8550 0.8668 0.8763 0.8820 0.8953 0.9020

 

  • AUD/USD edged lower in the Asian session but then reversed directions and broke above resistance at 0.8763. The pair continues to move upwards in European trade.
  • On the upside, 0.8820 is an immediate resistance line. 0.8953 is stronger.
  • 0.8763 has reverted back to a support role. It is a weak line and could see further activity during the day. 0.8668 is stronger.
  • Current range: 0.8763 to 0.8820

Further levels in both directions:

  • Below: 0.8763, 0.8668, 0.8550 and 0.8456
  • Above: 0.8220, 0.8953, 0.9020, 0.9119 and 0.9217

 

OANDA’s Open Positions Ratio

AUD/USD ratio is almost unchanged on Friday, continuing the trend seen a day earlier. This is consistent with what we’re seeing from the pair, which has shown limited movement. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD breaking out and moving to higher ground.

 

AUD/USD Fundamentals

  • 14:00 US New Home Sales. Estimate 473K.

* 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.