AUD/USD: Aussie Rises on Weak US CPI

AUD/USD has posted gains on Tuesday, as the pair has pushed above the 0.94 line in the North American session. The Aussie has moved higher as US CPI posted a weak gain of 0.1% last month. Today’s other key release is Existing Home Sales, which will be released later in the day. In Australia, RBA Governor Glenn Stevens spoke at an event in Sydney. We’ll get a look at Australian CPI early on Wednesday.

US inflation numbers continue to struggle. Core CPI posted a paltry gain of 0.1%, shy of the estimate of 0.2%. The key index has looked anemic in 2014, with its highest gain this year at just 0.3%. CPI gained 0.3% last month, matching the forecast. The markets are expecting better news on the housing front, as Existing Home Sales is expected to show strong gains in June.

On Friday, US Consumer Sentiment remained steady at 81.3 points, but this was well below the estimate of 83.5 points. A day earlier, Unemployment Claims dropped slightly to 302 thousand, beating the estimate of 310 thousand. This figure marks a seven-week low, as the economy continues to churn out impressive employment data. With Janet Yellen telling Congress that a rate hike could be pushed forward if inflation and employment data exceeds expectations, improving employment data will put more pressure on the Fed to raise rates.

The Australian dollar continues to hold its own against its US counterpart, despite some unimpressive Australian data last week. The important CB Leading Index continues to struggle, as the indicator posted a weak gain of 0.2% last month. This was the first reading above the zero level since March. NAB Quarterly Business Confidence came in at 6 points in the second quarter. This was down from the previous reading of 7 points, which was upwardly revised from a previously estimated reading of 6 points.

AUD/USD for Tuesday, July 22, 2014

AUD/USD July 22 at 13:00 GMT

AUD/USD 0.9418 H: 0.9421 L: 0.9361

AUD/USD Technical

• AUD/USD has posted gains in the Asian session and again late in the European session.
• 0.9361 has strengthened as the Aussie has posted gains. There is stronger support at 0.9229.
• 0.9446 is an immediate resistance line. This is followed by resistance at 0.9617.

Further levels in both directions:

• Below: 0.9361, 0.9229, 0.9119 and 0.9000
• Above: 0.9446, 0.9617, 0.9757 and 0.9842

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Tuesday, reversing the trend seen a day earlier. This is consistent with the movement of the pair, as the Australian dollar has posted gains. The ratio is almost evenly split between long and short positions, indicative of a lack of trader bias as to where AUD/USD is headed.

AUD/USD Fundamentals

• 3:00 RBA Governor Glenn Stevens Speaks.
• 12:30 US Core CPI. Estimate 0.2%. Actual 0.1%.
• 12:30 US CPI. Estimate 0.3%. Actual 0.2%.
• 13:00 US HPI. Estimate 0.4%. Actual 0.4%.
• 14:00 US Existing Home Sales. Estimate 4.98M.
• 14:00 US Richmond Manufacturing Index. Estimate 5 points.

* Key releases are highlighted in bold

*All release times are GMT

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