By Stuart McPhee
After showing some resilience over the last few days by moving to a one-week high above 0.9150, the AUD/USD has since turned around sharply and fallen heavily down to a three-month low close to 0.89. After all of its steady good work a few weeks ago in the middle of November which saw the AUD/USD steadily move higher from support at 0.93 back up to a one-week high near 0.9450, the AUD/USD has since returned all of those gains and some. After settling around the 0.95 level for over a week earlier last month, the AUD/USD started to drift lower back towards the support at 0.93. Throughout most of October the AUD/USD enjoyed a solid and steady move higher from the support level at 0.93 up to the resistance level at 0.95 and beyond to a high around 0.9760.
Throughout the first half of September the AUD/USD enjoyed a solid run which was punctuated by a strong surge higher sending it to a then three-month high just above 0.95. A couple of months ago the AUD/USD had been trying valiantly to stay above the support level at 0.89 as all week it placed downward pressure but was unable to sustain any break lower. At the beginning of August it moved very well from three-year lows to move back above the key level of 90 cents and beyond to a two-week high just above 0.92 to finish out that week. At the end of July the AUD/USD fell very strongly and appeared to resume the medium term downtrend as it moved to a new three-year low near 0.8850 but it reversed very well and looked poised to continue back towards the longer-term resistance level at 0.93. For the most part of the last week, it moved very little and was quite subdued staying above the support level at 0.94.
Throughout July the AUD/USD placed constant pressure on the 0.93 level again as it continued to place buying pressure on that level however the resistance there was able to stand firm. It was during this time it did very well to maintain its price level well above 0.92 as place upward buying pressure on the resistance level at 0.93. Throughout July, the AUD/USD spent most of its time trading between 0.90 and 0.93 threatening to break through either level at multiple stages. The 0.9150 level also became a key level during that time providing both some resistance and more recently support, and this was called upon again a few weeks ago providing some much needed support however it was completely ignored a couple of weeks ago as the AUD/USD fell heavily through it. Considering the speed of its decline throughout several months this year, the second half of this year has seen a significant slowing down and almost some consolidation as it has rested well on the support at 0.90 several times. Throughout April to August, the AUD/USD established a strong medium-term downtrend with lower peaks and lower troughs, as it has moved from near 1.06 down to near 0.90 in that time.
Australia's unemployment rate has edged higher but it won't be enough to inspire another cash rate cut, economists say. The jobless rate increased to 5.8 per cent in November, in line with economists' expectations, from 5.7 per cent in October, seasonally adjusted, the Australian Bureau of Statistics said on Thursday. That was despite the economy adding another 21,000 jobs in November. But the number of people looking for work also rose. The job creation figures were slightly better than expected, ANZ chief economist Ivan Colhoun said, but the trends were still "a touch on the soft side". He said the unemployment rate only increased by 0.02 per cent between October and November, from 5.74 per cent to 5.76 per cent, but the headline figure had changed because of rounding.
(Daily chart / 4 hourly chart below)
AUD/USD December 12 at 22:45 GMT 0.8925 H: 0.9069 L: 0.8916
During the early hours of the Asian trading session on Friday, the AUD/USD is consolidating within a narrow range around 0.8930 after its strong fall in the last 12 hours. Despite its strong recovery in September, the Australian dollar has been in a free-fall for a lot of this year. Current range: trading just above 0.8920.
Further levels in both directions:
• Below: 0.8900.
• Above: 0.9500, 0.9550 and 0.9700.
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 passed 70% as the Australian dollar falls below 0.90 for the first time in three months. The trader sentiment remains in favour of long positions.
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