AUD/USD – Steady as Australian Trade Deficit Narrows

AUD/USD has posted small gains on Tuesday, as the pair trades at the 0.81 line. On the release front, Australian Trade Balance improved to AUD -0.93 billion. Australian AIG Services Index will be released later in the day. In the US, the major event on the schedule is ISM Non-Manufacturing PMI, with the markets expecting a weaker reading for December. The estimate stands at 58.2 points.

Australian Trade Balance was stronger than expected, as the trade deficit narrowed in November to AUD -0.93 billion, marking a 3-month low. This was well below the forecast of AUD -1.59 billion. Meanwhile, Australian commodity prices continue to soften, as demand for Australian exports such as iron ore and gold has weakened. The Commodity Prices indicator continues to post sharp declines, and on Friday, the December report showed a loss of 21.2%. These readings point to trouble in the export sector, and the struggling Australian dollar lost about 100 points on Friday.

On Friday, US ISM Manufacturing PMI disappointed, falling to 55.5 points. This missed the forecast of 57.6 points and marked a 6-month low for the index. Still, market sentiment remains positive regarding the US economy and the US dollar continues to look sharp against its major rivals. We’ll get a look at the ISM Non-manufacturing PMI on Tuesday. The markets are expecting a softer reading in the December release.

AUD/USD for Tuesday, January 6, 2015

AUD/USD January 6 at 14:15 GMT

AUD/USD 0.8105 H: 0.8158 L: 0.8086

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7799 0.7904 0.8081 0.8150 0.8214 0.8315

 

  • AUD/USD posted slight gains in the Asian session, testing resistance at 0.8150. The pair is unchanged in European trade.
  • 0.8081 is a weak support line. 0.7904 is next.
  • 0.8150 is an immediate resistance line. This is followed by 0.8214.
  • Current range: 0.8081 to 0.8150.

Further levels in both directions:

  • Below: 0.8081, 0.7904, 0.7799 and 0.7701
  • Above: 0.8150, 0.8214, 0.8315, 0.8456 and 0.8550

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Tuesday, continuing the direction seen a day earlier. This is not consistent with the movement of the pair, as the Australian dollar has posted small gains. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD moving higher.

AUD/USD Fundamentals

  • 12:30 Australian Trade Balance. Estimate -1.59B. Actual -0.93B.
  • 14:45 US Final Services PMI. Estimate 53.8 points.
  • 15:00 US ISM Non-Manufacturing PMI. Estimate 58.2 points.
  • 15:00 US Factory Orders. Estimate -0.3%
  • 22:30 Australian AIG Services Index.

*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.