AUD/USD – Limited Movement as US Housing Data Disappoints

AUD/USD has started the week quietly, as the pair trades at the 0.88 line in the North American session. In economic news, US Pending Home Sales posted a weak gain of 0.3%, well off the estimate of 1.1%. There are no Australian releases on Monday.

In the US, last week’s jobless numbers were softer than expected. Unemployment Claims rose to 284 thousand, much higher than the previous reading of 264 thousand, and above the estimate of 269 thousand. However, the markets were not overly 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 and Core CPI both posted small gains of 0.1%.

Last week, 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 Monday, October 27, 2014

AUD/USD October 27 at 14:45 GMT

AUD/USD 0.8800 H: 0.8829 L: 0.8789

 

AUD/USD Technical

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

 

  • AUD/USD has been uneventful during the day. The pair continues to test resistance at 0.8820.
  • On the upside, 0.8820 is under strong pressure. 0.8953 is stronger.
  • 0.8763 is an immediate support line. 0.8668 is next.
  • 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 pointing to gains in short positions on Monday. This is not consistent with what we’re seeing from the pair, which has shown very 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

  • 13:45 US Flash Services PMI. Estimate 57.9 points. Actual 57.3 points.
  • 14:00 US Pending Home Sales. Estimate 1.1%. Actual 0.3%.

* 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.