AUD/USD – Little Change After Strong Consumer Sentiment

AUD/USD has posted slight gains on Wednesday, as the pair trades slightly above the 0.82 line. On the release front, Australian Westpac Consumer Sentiment was very strong, posting a gain of 2.4%. In the US, today’s releases painted a mixed picture. Building Permits fell short of expectations, coming in at 1.03 million. Housing Starts was up sharply, improving to 1.09 million.

Late Tuesday, Westpac Consumer Sentiment impressed in December, as the indicator posted a strong gain of 2.4%, rebounding from a sharp decline of 5.7% a month earlier. The indicator has fluctuated considerably, making it a tricky task to gauge the mood of the Australian consumer. Earlier in the week, New Motor Vehicle Sales, an important gauge of consumer spending, looked sharp with a 3% gain.

World markets were in turmoil following last week’s bombshell from the Swiss central bank, which abruptly abandoned its EUR/CHF cap, leaving the euro out to dry against the Swiss franc. As the markets await the ECB policy meeting on Thursday, is this the calm before the next storm? On Wednesday, French President Francois Hollande stated flat out that the ECB will announce a quantitative easing package at the ECB meeting. However, now that a QE is likely priced in, the question remains what will be the size of the program? The markets are anticipating QE of between EUR 500-600 billion, but some market players are saying that the ECB could go as high as EUR 800 billionWill the euro take a hit on Thursday? The likelihood is yes, unless the ECB surprises with a “QE lite”, such as EUR 300 billion, which would be well below expectations.

AUD/USD for Wednesday, January 21, 2015

AUD/USD January 21 at 15:05 GMT

AUD/USD 0.8184 H: 0.8234 L: 0.8156

 

AUD/USD Technical

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

 

  • AUD/USD posted gains in the Asian session. The pair lost ground but then recovered in European trade. AUD/USD has lost ground in North American trade, putting pressure on the Aussie.
  • 0.8150 is a weak support line. 0.8081 is stronger.
  • 0.8214 is the next resistance line. 0.8315 is stronger.
  • 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 almost unchanged on Wednesday. This is consistent with the pair’s movement, as the Aussie has shown been unable to consolidate gains made earlier in the day. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD moving higher.

AUD/USD Fundamentals

  • 13:30 US Building Permits. Estimate 1.06M. Actual 1.03M.
  • 13:30 US Housing Starts. Estimate 1.04M. Actual 1.09M.

*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.