AUD/USD – Aussie Posts Gains On Positive Australian Data

AUD/USD has posted gains on Wednesday, as the pair trades at the 0.79 line. In Australia, Construction Work Done posted a decline of 0.2%, well above expectations. Wage Price Index gained 0.6%, matching expectations. In the US, Federal Reserve head Janet Yellen continues a second day of testimony in Congress. We’ll get a look at New Home Sales during the day, with the markets expecting a softer reading in the January report.

Janet Yellen testified before a Senate committee on Tuesday, saying that the Fed was “unlikely” to raise interest rates in the next few months, given current economic conditions. Her remarks seemed aimed at quelling rising speculation about a rate hike sometime in mid-2015, which has helped boost the US dollar’s performance against its major rivals. Yellen noted that the continuing growth should lead to the unemployment rate continuing to fall. The Fed Chair will resume testimony before the House Financial Services Committee on Wednesday, but it’s not likely that Yellen will say anything which will shake up the markets.

The Australian dollar has moved higher on Wednesday, taking advantage of positive Australian data. Construction Work Done posted a third straight decline, but the drop of 0.2% was much better than the forecast of -1.2%. Meanwhile, the Wage Price Index remained unchanged for a third consecutive quarter, posting a gain of 0.6% in Q4. This indicator is closely monitored as wage prices are an important indicator of consumer inflation.

AUD/USD for Wednesday, February 25, 2015

AUD/USD February 25 at 13:55 GMT

AUD/USD 0.7900 H: 0.7900 L: 0.7830

AUD/USD Technical

• AUD/USD posted gains in the Asian session. The pair showed little movement in European trade. AUD/USD has edged higher early in the North American session.
• 0.7799 has strengthened in support as the Aussie trades at higher levels.
• On the downside, 0.7904 is under pressure. Will the pair push above this line in the North American session? 0.8081 is stronger.
• Current range: 0.7799 to 0.7904

Further levels in both directions:

• Below: 0.7799,  0.7684, 0.7582, 0.7403 and 0.7265
• Above: 0.7904, 0.8081, 0.8150, 0.8214 and 0.8379

OANDA’s Open Positions Ratio

(Shows the ratio of long vs. short positions held for the AUD/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)

AUD/USD ratio is pointing to short positions in Wednesday. This is not consistent with the pair’s movement, as the Aussie has posted gains. The ratio has switched to a majority of short positions, indicative of trader bias towards the Australian dollar reversing direction and moving lower.

AUD/USD Fundamentals

• 00:30 Australian Construction Work Done. Estimate -1.2%. Actual -0.2%.
• 00:30 Australian Wage Price Index. Estimate 0.6%. Actual 0.6%.
• 15:00 US Federal Reserve Chair Janet Yellen testifies in Congress.
• 15:00 US New Home Sales. Estimate 471K.
• 15:30 US Crude Oil Inventories. Estimate 3.6M.

*Key releases are highlighted in bold

*All release times are GMT

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