AUD/USD – Little Movement Ahead of US Consumer Confidence Data

The Australian dollar is trading fairly quietly in Tuesday trading. In the European session, the pair is trading in the high-0.93 range. In economic news, today’s key release is US CB Consumer Confidence. The markets are expecting a drop in the key indicator, with an estimate of 79.9 points. This would be the first time the indicator has dropped below the 80 level since May. There are no Australian releases scheduled on Monday.

AUD/USD was up sharply last week, following the surprise announcement on Wednesday by the Federal Reserve not to taper its bond-buying program. Most analysts had expected the Fed to announce a scaling down of the present bond-buying program of $85 billion/mth by $10-15 billion. However, the Fed was of the opinion that US economic data, particularly employment numbers, did not justify scaling down QE at this time. After the FOMC Statement, Federal Reserve Bank of St. Louis President James Bullard shed some light on the dramatic move (or lack of) by the Federal Reserve. Bullard said the vote was close, but weaker US numbers led to a decision not to taper. He added that the Fed may go ahead with “small” reductions to QE at its next policy meeting in October.

Overshadowed by the FOMC Statement were some excellent US releases on Thursday. Unemployment Claims came in at 309 thousand, well below the estimate of 331 thousand. Existing Home Sales rose to 5.48 million, crushing the estimate of 5.27 million and posting its best level in over three years. The Philly Fed Manufacturing Index rocketed from 9.3 to 22.3 points, its best showing since May 2011. Perhaps if we’d seen this kinds of numbers a week or two ago, the Fed might have introduced QE tapering. Meanwhile, the Fed has its next policy meeting in October, and this time we could see Bernanke and company take some action.

The Australian dollar started off the week on a positive note after strong Chinese Flash Manufacturing PMI release. The key index continues to point to expansion, improving from 50.1 points in July to 51.2 points in August. This beat the estimate of 50.9 points. Key Chinese releases, such as Manufacturing PMI, can have a major impact on the Australian dollar, since China is Australia’s number one trading partner.

AUD/USD for Tuesday, September 24, 2013

AUD/USD 0.9388 H: 0.9420 L: 0.9373

AUD/USD Technical

• AUD/USD is down slightly in Tuesday trading. The pair has dropped below the 94 line in the European session.
• The pair is testing resistance at the round number of 0.9400. This is followed by stronger resistance at 0.9508.
• On the downside, the pair is receiving support at 0.9328. Next, there is a support level at 0.9221.
• Current range: 0.9328 to 0.9400

Further levels in both directions:

• Below: 0.9328, 0.9221, 0.9135 and 0.9089
• Above: 0.9400, 0.9508, 0.9613, 0.9700 and 0.9821

OANDA’s Open Positions Ratio

AUD/USD ratio is showing little change in Tuesday trading. This is reflective of what we are currently seeing from the pair, as the pair trades quietly. Long positions retain a sizeable majority, indicative of strong trader sentiment towards the Aussie moving higher against the US dollar.

AUD/USD is trading quietly, close to the 0.94 line. With the US releasing key consumer confidence data later in the day, we could see some activity from the pair if the release is not in line with market expectations.

AUD/USD Fundamentals

• 13:00 US S&P/CS Composite-20 HPI. Estimate 12.5%.
• 13:00 US HPI. Estimate 0.9%.
• 14:00 US CB Consumer Confidence. Estimate 79.9 points.
• 14:00 US Richmond Manufacturing Index. Estimate 17 points.

*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.