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AUD/USD – Aussie Shrugs Off Weak Consumer Confidence

The improving Australian dollar is steady on Wednesday, as AUD/USD trades above the 0.90 line in European trading. The Aussie continues to impress lately, having climbed almost 300 points in just over a week. In economic news, Australian Westpac Consumer Sentiment posted a third straight decline. It’s a quiet day in the US, with just three releases. On Tuesday, Fed chair Janet Yellen testified before Congress and reiterated that the Fed plans to continue tapering QE. JOLT Job Openings, a key event, showed little change in January and fell short of the estimate. There are no Australian releases on Wednesday.

Consumer confidence in Australia continues to weaken, as Westpac Consumer Sentiment dipped 3.7% in January, its third straight decline and fourth in the past five readings. A decrease in consumer confidence likely means less consumer spending, which is critical for economic growth. However, Australia did post strong business confidence and inflation numbers earlier in the week. NAB Business Confidence rose to 8 points, a four-month best. House Price Index jumped 3.4%, beating the estimate of 3.2%. Home Loans failed to keep pace, posting a decline of -1.9%. This was well below the estimate of +0.5%.  Meanwhile, Chinese Trade Balance improved to $31.9 billion, up from $25.6 billion a month earlier, and well above the estimate of $24.2 billion. Since China is Australia’s number one trading partner, key Chinese data such as Trade Balance can affect the movement of AUD/USD.

Fed chair Janet Yellen, who just started her new job on February 1, didn’t generate much excitement in her appearance before Congress on Tuesday. She said that the Fed plans to continue trimming QE, provided that the employment picture continues to improve and inflation rises. She acknowledged that even though the unemployment rate has improved steadily, the recovery in the labor market is far from complete. Meanwhile, JOLTS Job Openings, a key event, showed little change in January, with a reading of 3.99 million. This was short of the estimate of 4.04 million.

 

AUD/USD for Wednesday, February 12, 2014

Forex Rate Graph 21/1/13

AUD/USD February 12 at 13:50 GMT

AUD/USD 0.9038 H: 0.9068 L: 0.9007

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8735 0.8893 0.9000 0.9119 0.9229 0.9361

 

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to losses in Wednesday trading. This is not consistent with what we are seeing from the pair, as the Australian dollar has posted slight gains. AUD/USD ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Aussie continuing its impressive rally.

The Australian dollar continues to point upwards and is trading above the 0.90 line. The pair has edged lower in the European session.

 

AUD/USD Fundamentals

 

*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 [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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