AUD/USD for Thursday, January 29, 2015
The last week has seen the Australian dollar fall very sharply and break lower from the trading range that had been established roughly between 0.8050 and 0.8200. This has resulted in a new multi-year low near 0.7850 in the last couple of days, which is currently being threaten again as the Australian dollar has fallen sharply in recent hours. Over the last couple of days it has been able to consolidate a little and find some support around 0.7900 which temporarily stopped the rot before the recent decline. A couple of weeks ago it made numerous attempts at the resistance level at 0.82 only to be sent back often before finally finishing that week moving through this key level. In doing so it was able to reach a one month high near 0.83 before being sold back down again towards 0.82 as the resistance and selling activity above this level kicked in. Over the Christmas / New Year period, the Australian dollar seemed to have been content with trading in a narrow range below the resistance at 0.82, which continues to remain a key level as it is presently provides resistance. A few weeks ago it drifted lower to a then multi-year low near 0.8030 before rallying higher. That low has now been broken over the last week and the area around 0.8000 to 0.8050 may now provide some resistance.
The Australian dollar experienced a disappointing November and December moving from resistance around 0.88 down to the new lows recently. For a couple of months from September through to November, the Australian dollar did well to stop the bleeding and trade within a range between 0.8650 and 0.88 after experiencing a sharp decline throughout September which saw it move from close to 0.94 down to below 0.8650. Back at the beginning of September the Australian dollar showed some positive signs as it surged higher again bouncing off support below 0.93 and reaching a new four week high around 0.94 however that all now seems a distant memory.
It seems a long way away now but the Australian dollar reached a three week high just shy of 0.9480 at the end of July after it enjoyed a solid period which saw it surge higher through the resistance level at 0.9425 to the three week around 0.9480, before easing back towards that level. The Australian dollar enjoyed a solid surge higher reaching a new eight month high above 0.95 at the end of June, only to return most of its gains in very quick time to finish out that week. Since the middle of June the Australian dollar has made repeated attempts to break through the resistance level around 0.9425, however despite its best efforts it was rejected every time as the key level continued to stand tall, even though it has allowed the small excursion to above 0.95.
Sharp falls in oil prices have dragged Australian inflation to near three year lows, but borrowers shouldn’t expect a rate cut from the RBA just yet, economists say. The price of Australian consumer goods and services rose just 0.2 per cent, in the December quarter, for an annual rate of 1.7 per cent, official figures on Wednesday showed. The consumer price index (CPI) figures were weaker than economists were expecting and fell below the RBA’s two-to-three per cent target band for the first time since 2012. But the weak result was mainly driven by recent sharp falls in the price of oil, which pushed the price of petrol down 6.8 per cent in the final three months of 2014, economists said. Underlying inflation, which strips out the effects of such volatile price movements, actually came in stronger than economists were expecting, rising 0.7 per cent in the December quarter for an annual rate of 2.25 per cent.
(Daily chart / 4 hourly chart below)
AUD/USD January 28 at 21:55 GMT 0.7891 H: 0.8025 L: 0.7884
AUD/USD Technical
S3
S2
S1
R1
R2
R3
0.7900
—
—
0.8200
0.8650
0.8800
During the early hours of the Asian trading session on Thursday, the AUD/USD is dropping sharply and is looking to threaten the recent lows around 0.7870. Current range: trading below 0.7900 at 0.7890.
Further levels in both directions:
• Below: 0.7900.
• Above: 0.8200, 0.8650, and 0.8800.
OANDA’s Open Position Ratios
(Shows the ratio of long vs. short positions held for the AUD/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The long position ratio for the AUD/USD has moved back to 60% as the Australian dollar has dropped sharply back under the resistance level at 0.82 and down to a multi-year low around 0.7850. The trader sentiment remains in favour of long positions.
Economic Releases
23:30 (Wed) JP CPI Core (Nation) (Dec)
23:30 (Wed) JP CPI Core (Tokyo) (Jan)
23:30 (Wed) JP Real Household Spending (Dec)
23:30 (Wed) JP Unemployment (Dec)
23:50 (Wed) JP Industrial Production (Prelim.) (Dec)
00:30 AU Import & Export Price Index (Q4)
09:00 EU M3 Money Supply (sa) (Dec)
09:00 EU Money Aggregates (Dec)
10:00 EU Business Climate Index (Jan)
10:00 EU Consumer Sentiment (Jan)
10:00 EU Economic Sentiment (Jan)
10:00 EU Industrial Sentiment (Jan)
13:30 US Initial Claims (24/01/2014)
15:00 US Pending Home Sales (Dec)
* 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.
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