AUD/USD – Aussie Dips to 75, RBA Minutes Next

The Australian dollar has posted losses on Monday, following gains of 100 points in the Friday session. AUD/USD is trading just above the 0.75 line in the North American session. On the release front, the markets are keeping a close eye on the RBA, which will release the minutes of the policy meeting from the end of February. Australia will also release New Motor Vehicle Sales. There are no US releases on Monday, but on Tuesday we’ll get a look at Retail Sales and PPI reports, with the markets bracing for small declines from these indicators.

The Aussie has enjoyed two weeks of sharp gains, and is currently trading at its highest level since late June. Global markets, which sagged in early 2016, have improved of late, as oil prices have stabilized and fears of a global recession have diminished. The RBA remains cautious, however, as Deputy Governor Philip Lowe stated last week that the RBA would maintain its easing bias, given weak inflation levels. The central bank maintained rates at 2.00% last week, and the markets will be combing through the upcoming minutes, which will contain details of the policy meeting and perhaps clues about future monetary policy.

Monday is an off-day for US releases, but after that the week will be busy, which could spell significant volatility in the currency markets. The US will release inflation and retail sales reports on Tuesday, followed by the FOMC policy statement. Will the Federal Reserve raise interest rates? Most experts say no, given current economic conditions. The economy continues to expand, although growth has been softer in 2016 compared to the red-hot pace which marked the economy in H2 of 2015. The primary trouble spot in the economy is the inflation picture, as inflation levels remains very low, a result of weak global demand and low oil prices. The cautious Fed will likely wait until mid-2016, and seriously consider a rate hike if the US economy shows that it is gaining steam.

AUD/USD Fundamentals

Monday (March 14)

  • 8:30 RBA Monetary Policy Meeting Minutes
  • 8:30 Australian New Motor Vehicles Sales

Tuesday (March 15)

  • 8:30 US Core Retail Sales. Estimate -0.2%
  • 8:30 US PPI. Estimate -0.2%
  • 8:30 US Retail Sales. Estimate -0.1%

*Key releases are highlighted in bold

*All release times are EST

 

AUD/USD for Monday, March 14, 2016

AUD/USD March 14 at 9:55 EST

AUD/USD  Open: 0.7561 Low: 0.7509 High: 0.7594 Close: 0.7510

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7213 0.7385 0.7472 0.7560 0.7678 0.7796
  • AUD/USD showed choppiness in the Asian session. The pair posted losses in European trade and the downward movement has continued in the North American session.
  • 0.7472 remains busy and has switched to a support role. It could see further action in the North American session
  • 0.7560 is a resistance line
  • Current range: 0.7472 to 0.756o

Further levels in both directions:

  • Below: 0.7472, 0.7385, 0.7213 and 0.7100
  • Above: 0.7560, 0.7678 and 0.7796

OANDA’s Open Positions Ratio

The AUD/USD ratio has shown strong movement towards short positions, which currently have a strong majority (57%),  indicative of trader bias towards AUD/USD continuing to move lower.

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.