AUD/USD – Slight Gains as Home Loans Improves

AUD/USD has posted slight gains on Wednesday, as the pair trades in the mid-0.83 range late in the European session. On the release front, Australian consumer confidence tumbled, dropping to 91.1 points. Housing Loans rebounded in October with a gain of 0.3%. In the US, there are no major events on Wednesday.

With the Australian economy struggling, confidence numbers have headed south. Westpac Consumer Sentiment stumbled in December, dropping to 96.6 points, down from 91.1 points a month earlier. NAB Business Confidence continued to tailspin as the key indicator slipped to 1 point in November. This marks the fourth straight month that the indicator has weakened. This has led to speculation that the RBA may be forced to lower rates in 2015, as the export-based economy has been hit hard by a prolonged global slowdown. Economic activity has slowed, as GDP dropped to 0.3% in Q3, its worst showing in over three years. This means that we can expect the struggling Aussie to remain under pressure.

China has been experiencing a slowdown, which spells bad news for Australia, as the Asian giant is Australia’s largest trading partner. Chinese inflation continues to lose ground, as CPI dipped to 1.4% in November, short of the estimate of 1.6%. The index has slipped badly since posting a gain of 2.5% back in May. Further weak data out of China could weigh on the struggling Australian dollar.

US employment data has rebounded in impressive fashion and the good news continued on Tuesday, as JOLTS Job Openings climbed to 4.83 million, up from 4.74 million a month earlier. This beat the estimate of 4.81 million. On Friday, Nonfarm Payrolls shot up to 321 thousand in November, stunning the markets which had expected a rise of 231 thousand. There was also a rise in wages, which should translate into stronger inflation numbers. The unemployment rate held steady at 5.8%, matching the forecast. The excellent Nonfarm Payrolls should help allay concerns about whether the economy can weather an expected rate increase in 2015.

AUD/USD for Wednesday, December 10, 2014

AUD/USD December 10 at 13:10 GMT

AUD/USD 0.8320 H: 0.8348 L: 0.8264

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8150 0.8240 0.8315 0.8456 0.8550 0.8668

 

  • AUD/USD posted losses early in the Asian session, testing support at 0.8315 before rebounding. The pair has been steady in the European session and this continues early in North American trade.
  • On the downside, 0.8315 remains under strong pressure. 0.8240 is stronger.
  • 0.8456 is a strong resistance line.
  • Current range: 0.8315 to 0.8456.

Further levels in both directions:

  • Below: 0.8315, 0.8240, 0.8150, 0.8081 and 0.7904
  • Above: 0.8456, 0.8550, 0.8668 and 0.8763

 

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Wednesday. This is consistent with the pair’s movement, as the Australian dollar has posted small gains. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD continuing to move higher.

AUD/USD Fundamentals

  • 00:30 Australian Home Loans. Estimate 0.1%. Actual 0.3%.
  • 15:30 US Crude Oil Inventories. Estimate -2.6M.
  • 18:01 US 10-year Bond Auction.
  • 19:00 US Federal Budget Balance. Estimate -68.3B.

*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.