AUD/USD – Aussie Fails to Improve Despite Weak US Durables, Consumer Confidence

The Australian dollar has posted modest losses on Tuesday, as AUD/USD trades at the 0.72 line in the North American session. Taking a look at today’s economic releases, US durables looked weak, as Core Durable Goods Orders declined 0.4%, while Durable Goods Orders came in at -1.2%. As well, CB Consumer Confidence came slipped to 97.6 points, missing expectations. Early Wednesday, we’ll get a look at Australian CPI, a key event. The estimate stands at 0.7% for the third quarter report.

It was a disappointing day for US releases. US durables, which helps gauge the strength of the manufacturing sector, were dismal in the September reports. Core Durable Goods Orders fell 0.4%, compared to the forecast of 0.0%. It marked the indicator’s first decline in six months. There was no relief from Durable Goods Orders, which posted a sharp decline of 1.2%, although this was within expectations. This was the indicator’s second straight decline, and these weak figures underscore a weak manufacturing sector, which continues to be hampered by weak global demand for US goods. There wasn’t any positive news on the consumer front, as CB Consumer Confidence dipped to 97.6 points, well below the forecast of 102.5 points.

Meanwhile, we’re getting mixed messages about the health of the US housing sector. Existing Housing Sales looked sharp last week, improving to 5.55 million, which was well above the estimate of 5.38 million. The news was much worse from New Home Sales on Monday, as the indicator slid to just 468 thousand, its lowest level in 10 months. The markets had expected a strong reading of 546 thousand.

It promises to be a busy week, as the Federal Reserve issues a policy statement on Wednesday. Any hints about a rate hike could spark a dollar buying spree. Will the Fed finally provide some clarity about its monetary plans? Such transparency and lack of communication from the Fed has been lacking and has been a source of frustration for the markets, which continue to receive conflicting signals from Fed policymakers regarding the timing of a rate hike. On Thursday, the US releases a market-mover, Advance GDP for the fourth quarter. The markets are expecting a gain of 1.6%, compared to Final GDP in the third quarter of 3.9%

The Australian dollar continues to wobble, a casualty of the weak Australian economy which continues to suffer from the global slowdown. There was some talk of the RBA lowering rates earlier this month in order to kick-start the economy. That didn’t happen, and the minutes of last week’s policy meeting shed some light on the central bank’s thinking. Policymakers noted that the economy had shown some improvement, crediting this to the lower value of the Australian dollar, which has boosted exports, as well as the RBA’s ultra-low interest rate levels. The RBA also expressed concern about the Chinese economy, but said that despite this, there was no need to lower rates for some time. Interestingly, policymakers said that some players in the financial markets don’t expect the Federal Reserve to raise rates for the “foreseeable future”.


AUD/USD Fundamentals

Tuesday (Oct. 27)

  • 12:30 US Core Durable Goods Orders. Estimate 0.0%. Actual -0.4%
  • 12:30 US Durable Goods Orders. Estimate -1.1%. Actual -1..2%
  • 13:00 US S&P/CS Composite-20 HPI. Estimate 5.1%. Actual 5.1%
  • 13:45 US Flash Services PMI. Estimate 55.3 points. Actual 54.4 points
  • 14:00 US CB Consumer Confidence. Estimate 102.5 points.  Actual 97.6 points 
  • 14:00 US Richmond Manufacturing Index. Estimate -3 points. Actual -1 point


Upcoming Events

Wednesday (Oct. 28)

  • 00:30 Australian CPI. Estimate 0.7%
  • 18:00 FOMC Statement
  • 18:00 Federal Funds Rate. Estimate <0.25%

*Key releases are highlighted in bold

*All release times are GMT


AUD/USD for Tuesday, October 27, 2015

AUD/USD October 27 at 18:45 GMT

AUD/USD  0.7198 H: 0.7258 L: 0.7192

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7000 0.7060 0.7100 0.7213 0.7440 0.7664
  • AUD/USD posted slight gains in the Asian session but surrendered these gains in European trade. The pair has posted modest losses in the North American session.
  • The round number of 0.71 is providing strong support.
  • 0.7213 has switched to a resistance role and is  weak line.
  • Current range: 0.7100 to 0.7213

Further levels in both directions:

  • Below: 0.7100, 0.7060 and 0.70
  • Above: 0.7213, 0.7440, 0.7664 and 0.7770


OANDA’s Open Positions Ratio

AUD/USD ratio is showing slight movement towards long positions on Tuesday, and long positions have a solid majority (57%), indicative of trader bias in favor of the Australian dollar reversing direction and moving to higher levels.

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

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