AUD/USD – Unchanged Despite Strong Australian Data

AUD/USD is listless on Monday, as the pair trades slightly above the 0.82 line in the North American session. On the release front, Australian New Motor Vehicle Sales posted a strong gain of 3.0%. MI Inflation Gauge dropped to 0.0%. US markets are closed in celebration of Martin Luther King Day.

The Aussie shrugged off an excellent performance from New Motor Vehicle Sales in December. The indicator jumped an impressive 3.0%, its strongest gain in more than 3 years. This points to stronger consumer spending, which is critical for the economy. On Sunday, MI Inflation Gauge continued its downward trend, falling to a flat 0.0%.

Currency markets were in turmoil on Thursday, as the Swiss National Bank abruptly abandoned its cap on the exchange rate between the euro and the franc, which had a floor of 1.20 for EUR/CHF. The cap had been in place since 2011, and the move marks a major policy reversal for the normally conservative Swiss central bank. Market reaction was swift, as the euro dropped some 15% against the franc, as the pair is currently trading at parity.

Why the dramatic move by the Swiss? One reason is an attempt to fight deflation, which is hurting the Swiss economy. As well, with the euro losing value, the SNB has had to increase its euro purchases to keep EUR/CHF within the cap, and the SNB may have finally soured on the common currency. The stunning move indicates that the SNB believes that the ECB will implement quantitative easing at its policy meeting on Thursday and didn’t want to have to prop up the ailing common currency, which will likely lose ground after a QE move.

AUD/USD for Monday, January 19, 2015

AUD/USD January 19 at 15:55 GMT

AUD/USD 0.8218 H: 0.8244 L: 0.8196

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8081 0.8150 0.8214 0.8315 0.8456 0.8547

 

  • AUD/USD has shown little movement on Monday., as the pair trades slightly above support at 0.8214.
  • 0.8315 is a strong resistance line.
  • On the downside, 0.8214 is under strong pressure. 0.8150 is next.
  • Current range: 0.8214 to 0.8315.

Further levels in both directions:

  • Below: 0.8214, 0.8150, 0.8081, 0.7904 and 0.7799
  • Above: 0.8315, 0.8456, 0.8547 and 0.8682

 

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Monday. This is consistent with the lack of movement currently displayed by the pair. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD moving higher.

AUD/USD Fundamentals

  • 00:30 Australian Motor Vehicle Sales. Actual 3.0%.

*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.