AUD/USD – Slight Gains in Thin Trade

The Australian has started off the week with slight gains. AUD/USD has climbed above the 0.87 in Monday’s European session. Trade is light, as the Australian markets are closed for a holiday. Australia will release CB Leading Index later on Monday. In the US,  today’s major release is New Home Sales. The markets are hoping to see better results than those of Existing Home Sales last week.

Australian inflation indicators looked solid last week. CPI, a key event, posted a gain of 0.8% in December. This was a drop from the 1.2% gain a month earlier, but well above the market estimate of 0.5%. Trimmed Mean CPI, which excludes the most volatile items purchased by consumers, came in at 0.9%, up from 0.7% in November. The indicator beat the estimate of 0.6%. Although these numbers were better than expected, the Aussie has not been able to find its footing against the surging US dollar and continues to lose ground.

Over in the US, Unemployment Claims was unchanged at 326 thousand, another strong reading for one of the most important economic indicators. This beat the estimate of 331 thousand, the third straight week that the reading has surpassed the forecast. US Existing Home Sales was unable to keep pace, however. The key indicator dropped to 4.87 million, down from 4.90M a month earlier and shy of the estimate of the 4.94 million. This was the indicator’s fourth consecutive drop, adding to concern about the health of the US housing industry. We’ll see if Monday’s New Home Sales brings better news.

 

AUD/USD for Monday, January 27, 2014

Forex Rate Graph 21/1/13

AUD/USD January 27 at 11:50 GMT

AUD/USD 0.8743 H: 0.8743 L: 0.8678

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.84505 0.8658 0.8735 0.8893 0.9000 0.9119

 

  • AUD/USD has posted gains in Monday’s European session.
  • 0.8735 is providing support. This line is under pressure and could break if the US dollar recovers. This is followed by support at 0.8658.
  • 0.8893 is the next resistance line. It is followed by resistance at the key level of 0.9000.
  • Current range: 0.8735 to 0.8893

 

Further levels in both directions:

  • Below: 0.8735, 0.8658, 0.8505, 0.8425 and 0.8363
  • Above: 0.8893, 0.9000, 0.9119 and 0.9229

 

OANDA’s Open Positions Ratio

AUD/USD ratio is showing little change in Monday trading, continuing the trend which characterized much of last week. This is not consistent with what we are seeing from the pair, as the Australian dollar has started off the week with gains against the US currency. AUD/USD ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar continuing to move higher against the US currency.

The Aussie has posted some gains in Monday trading. With the US releasing key housing numbers later in the day, we could see some action during the North American session.

 

AUD/USD Fundamentals

  • 23:00 Australian CB Leading Index.
  • 14:00 US Flash Services PMI. Estimate 56.2 points.
  • 15:00 US New Home Sales. Estimate 457K.

 

*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.