AUD/USD – Limited Movement as Business Confidence Remains Low

AUD/USD continues to have a quiet week, as the pair trades in the mid-0.79 range on Tuesday. The Aussie is coming off a terrible week, in which it lost over 300 points against the US dollar. On the release front, NAB Business Confidence showed little change, edging up to 2 points. In the US, Durable Goods Orders posted a sharp decline of 3.4%. Later in the day, we’ll get a look at CB Consumer Confidence and New Home Sales.

US durable goods orders looked awful in December. Durable Goods Orders plunged 3.4%, marking a 4-month low. There was no relief from Core Durable Goods Orders, which declined by 0.8%, its fifth drop in six readings. The markets had predicted gains for both indicators.

A tumultuous week in the currency markets spelled disaster for the Australian dollar, which tumbled more than 300 points, falling below the key 0.80 level. AUD/USD is currently at its lowest level since July 2009, and pair’s slide could continue. With the Bank of Canada cutting rates and the ECB embarking on a huge QE program, there is growing speculation that the RBA will follow suit and lower its current rate of 2.50%. Although the rate is low by Australian standards, it is well above the benchmark rates of most developed nations. The RBA has stated that it would prefer the Aussie trade around US 75 cents in order to boost sluggish growth. The RBA is unlikely to lower rates in February, but we could see a move in the near future if the economy does not improve.

AUD/USD for Tuesday, January 27, 2015

AUD/USD January 27 at 15:00 GMT

AUD/USD 0.7961 H: 0.7974 L: 0.7906

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7684 0.7799 0.7904 0.8081 0.8150 0.8214

 

  • AUD/USD has been uneventful on Tuesday. The pair touched a high of 0.7974 early in the North American session.
  • 0.7904 is an immediate support line.
  • 0.8081 remains a strong resistance line.
  • Current range: 0.7904 to 0.8081.

Further levels in both directions:

  • Below: 0.7904, 0.7799. 0.7684 and 0.7528
  • Above: 0.8081, 0.8150, 0.8214, 0.8315 and 0.8456

 

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Tuesday. This is consistent with the lack of movement 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 NAB Business Confidence. Actual 2 points.
  • 13:30 US Core Durable Goods Orders. Estimate +0.6%. Actual -0.8%.
  • 13:30 US Durable Goods Orders. Estimate +0.6%. Actual -3.4%.
  • 14:00 US S&P/CS Composite-20 HPI. Estimate 4.4%. Actual 4.3%.
  • 14:45 US Flash Services PMI. Estimate 53.9 points. Actual 54.0 points.
  • 15:00 US CB Consumer Confidence. Estimate 95.3 points.
  • 15:00 US New Home Sales. Estimate 452K.
  • 15:00 US Richmond Manufacturing Index. Estimate 6 points.

*Key releases are highlighted in bold

*All release times are GMT

 

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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.