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AUD/USD – Aussie Rebounds As RBA Maintains Rates

AUD/USD has improved on Tuesday, as the pair has recouped most of the losses incurred on Monday. In the European session, the pair is trading in the mid-0.92 range in Monday’s European session. As expected, the RBA held interest rates at 2.50%. Retail Sales posted a weak gain of 0.2%, while Current Account continued to improve. In the US, it’s a quiet schedule, highlighted by Factory Orders.

There were no surprises from the RBA, as it maintained the benchmark interest rate at 2.50%, where they have been pegged since last July. The RBA noted that present monetary policy would “foster sustainable growth in demand and inflation”, and the Aussie reacted with slight gains. Meanwhile, Retail Sales, the primary gauge of consumer spending, posted a weak gain of just 0.2%, short of the estimate of 0.3%. This follows a poor showing from Australian Building Permits, which posted its third consecutive decline. The indicator came in at -5.6%, nowhere near the estimate of +2.1%.

It’s not often that a key indicator drops and magically recovers a day later. However, this was the case with ISM Manufacturing PMI. The well-respected ISM Business Survey Committee reported on Monday that the key index had softened in May, but has since corrected its reading. The index actually improved to 55.4 points in May, up from 54.9 points a month earlier. As well, Final Manufacturing PMI and ISM Manufacturing Prices improved. This points to an expanding manufacturing sector, which is good news for the recovery. The markets will be hoping for more good news from today’s highlight, Factory Orders.

 

AUD/USD for Tuesday, June 3, 2014

AUD/USD June 3 at 10:20 GMT

AUD/USD 0.9247 H: 0.9308 L: 0.9243

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9000 0.9119 0.9229 0.9361 0.9446 0.9617

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions in Tuesday trading, reversing the direction we saw a day earlier. This is consistent with the movement of the pair, as the Aussie has gained ground. The ratio currently has a majority of long positions, indicative of a trader bias towards the Australian dollar continuing to move upwards.

AUD/USD has posted gains on Tuesday. 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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