AUD/USD – Aussie Shrugs Off Positive Chinese GDP

AUD/USD is listless on Tuesday, as the pair trades just below the 0.82 line early in the North American session. On the release front, Australia will release Westpac Consumer Sentiment later in the day. It’s quiet in the US, with just one indicator on the schedule – NAHB Housing Market Index.

Chinese GDP came in at 7.3% for Q4, edging above the estimate of 7.2%. This eased worries about a slowdown in China, the world’s second largest economy, as GDP kept up with its pace in Q3. The Australian dollar is sensitive to key Chinese data, as the Asian giant is Australia’s number one trading partner.

On Monday, the Aussie shrugged off an excellent performance from New Motor Vehicle Sales. 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. Meanwhile, MI Inflation Gauge continued its downward trend, falling to a flat 0.0%. The monthly index is used to help track CPI, which is released every quarter.

It’s been less than a week since the SNB stunned the markets by suddenly removing the cap with the euro. This resulted in the euro recording sharp losses against the Swiss franc and the US dollar. However, the markets have had to quickly change focus, as there is growing anticipation that the ECB will announce a QE package on Thursday, when the ECB meets for a crucial policy meeting. The Eurozone has been plagued by deflation and weak growth, and the SNB shocker only reinforces the belief that the ECB will finally make a move. Even if QE has been priced in, there’s no way to know the size of such a scheme, so traders could be in for plenty of volatility from EUR/USD later in the week.

AUD/USD for Tuesday, January 20, 2015

AUD/USD January 20 at 15:20 GMT

AUD/USD 0.8175 H: 0.8218 L: 0.8160

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7904 0.8081 0.8150 0.8214 0.8315 0.8456

 

  • AUD/USD has shown little movement on Tuesday, as the pair continues to trade in a tight range.
  • 0.8214 is a weak support line. 0.8081 is next.
  • On the upside, 0.8214 is an immediate resistance line, which was tested in the European session. 0.8325 is next.
  • Current range: 0.8150 to 0.8214.

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Tuesday. This is consistent with the pair’s movement, as the Aussie has posted small losses. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD breaking above range.

AUD/USD Fundamentals

  • 15:00 US FOMC Member Jerome Powell Speaks.
  • 15:00 US NAHB Housing Market Index. Estimate 58 points.
  • 23:30 Australian Westpac Consumer Sentiment.

*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.