AUD/USD – Aussie Gains Continue as Markets Eye Federal Reserve

AUD/USD has posted modest gains on Wednesday, as the pair trades at the 0.89 line. The Australian dollar is enjoying some momentum, having improved over 100 points this week. On the release front, the FOMC concludes its policy meeting, with the Fed expected to wind up its QE program. There are no Australian releases on Wednesday.

In the US, durable goods looked dismal in September. Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was the indicator’s second straight decline and missed the estimate of 0.4%. There was much better news from CB Consumer Confidence, as the indicator climbed to 94.5 points, up sharply from 86.0 points. The easily beat the estimate of 87.4 and marked a 7-year high.

The Federal Reserve will be in the spotlight on Wednesday as the US central bank releases its monthly statement. It is widely expected that the Fed will wind up its stimulus scheme, which has been in place since September 2012. Such a symbolic step would mark a vote of confidence in the economy from the powerful Fed. The markets will also be looking for hints regarding the timing of a rate hike, which is expected sometime in 2015. The Fed has noted its concern about the lack of growth in Europe, and a slowdown in China could put a rate hike on hold. Traders should treat the FOMC policy statement as a market-mover which could have a significant impact on the currency markets.

AUD/USD for Wednesday, October 29, 2014

AUD/USD October 29 at 14:55 GMT

AUD/USD 0.8900 H: 0.8911 L: 0.8854

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8668 0.8763 0.8820 0.8953 0.9020 0.9119

 

  • AUD/USD posted gains late in the Asian session and has posted slight gains in the European and North American sessions. The pair remains rangebound as it trades at the 0.89 line.
  • 0.8820 is providing support.
  • 0.8953 is a weak resistance line. 0.9020 is next. This line was last breached in mid-September.
  • Current range: 0.8820 to 0.8953.

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Wednesday. This is not consistent with what we’re seeing from the pair, as the Australian dollar has posted gains. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD continuing to move to higher ground.

 

AUD/USD Fundamentals

  • 14:30 US Crude Oil Inventories. Estimate 3.3M.
  • 18:00 US FOMC Statement.
  • 18:00 US Federal Funds Rate. Estimate <0.25%.

* 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.