AUD/USD – Lower As Australian Construction Numbers Slip

The Australian dollar has lost ground on Wednesday, as AUD/USD has dipped below the key 0.90 level. In economic news, Australian Construction Work Done disappointed, declining 1.0% in January. Over in the US, it’s a quiet day, with just two releases on the schedule, led by New Home Sales.

The Australian dollar is once again trading below the 0.90 level, and didn’t get any help from a weak construction release on Wednesday. Construction Work Done dropped by 1.0%, its fourth decline in five months. The markets had expected a gain of 0.4%. This points to trouble in the important construction industry. We’ll get a look at Private Capital Expenditure, a key release, early on Thursday. If the indicator has a weak outing, the wobbly Aussie could head further southwards.

Is the US housing sector experiencing a downturn? Recent US numbers have not looked sharp, and the weak numbers are being felt in the housing industry. Building Permits slid to a five-month low in January, dropping to 0.94 million. The estimate stood at 0.98 million. Existing Home Sales looked awful, dropping to 4.62 million in January, compared to 4.87 million a month earlier. This was well short of the estimate of 4.73 million, and the lowest reading from the key indicator since July 2012. The markets will be hoping for better news from New Home Sales, which will be released on Wednesday.

Last week’s Federal Reserve minutes indicated that interest rates are unlikely to rise, even if unemployment drops to 6.5%. Previously, the Fed had said it would consider raising rates at the 6.5% threshold, but with unemployment falling faster than expected, Fed policymakers agreed that it would “soon be appropriate” to revise the Fed’s forward guidance regarding interest rate levels. The minutes also indicated that the Fed will likely continue trimming QE, barring any downturns in the economy.


AUD/USD for Wednesday, February 26, 2014

Forex Rate Graph 21/1/13

AUD/USD February 26 at 14:05 GMT

AUD/USD 0.8968 H: 0.9026 L: 0.8964


AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8658 0.8735 0.8893 0.9000 0.9119 0.9229


  • AUD/USD has posted losses in Wednesday trading.
  • 0.9000 has switched back to a resistance role. This is a weak line which has already seen action on Wednesday. This is followed by stronger support at 0.8893.
  • On the upside, there is resistance at 0.9119. There is followed by resistance at 0.9229.
  • Current range: 0.8893 to 0.9000


Further levels in both directions:

  • Below: 0.8893, 0.8735, 0.8658 and 0.8516
  • Above: 0.9000, 0.9119, 0.9229, 0.9361 and 0.9466


OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions in Wednesday trading. This is not consistent with what we are seeing from the pair, as the Aussie continues to lose ground. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias towards the Australian dollar reversing directions and moving higher against the US currency.

AUD/USD has dropped below the 0.90 line in the European session, and the Australian dollar remains under strong pressure.


AUD/USD Fundamentals

  • 00:30 Australian Construction Work Done. Estimate +0.4%. Actual -0.1%.
  • 15:00 US New Home Sales. Exp. 406K.
  • 15:30 US Crude Oil Inventories. Exp. 1.1M.

*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

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.
Kenny Fisher

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