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By Kenny Fisher

The Australian dollar is quiet in Monday trading, as AUD/USD trades just below the 0.90 line. In economic news, it's a very quiet day, with just one US release, Flash Services PMI. There are no Australian releases on Monday. On Friday, US Existing Home Sales looked weak, as the key indicator slumped to its lowest level since July 2012.

US numbers failed to impress last week. After weak releases from Building Permits and the Philly Manufacturing Index, Existing Home Sales sagged on Friday, 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 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.

The wobbly Aussie is sensitive to key Chinese releases, as China is Australia's number one trading partner. Last week, Chinese Flash Manufacturing PMI pointed to contraction in the manufacturing sector for a second straight month, coming in below the 50-point level. The index dropped to 48.3 points, its lowest level in eight months. A decrease in Chinese manufacturing could have serious consequences for the Australian economy and weigh on the shaky Australian dollar. We'll get a look at Chinese Final Manufacturing PMI on Saturday.

AUD/USD for Monday, February 24, 2014

Forex Rate Graph 21/1/13

AUD/USD February 24 at 14:15 GMT

AUD/USD 0.8989 H: 0.8996 L: 0.8938

AUD/USD Technical

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

  • AUD/USD is showing little activity in Monday trading.
  • 0.8893 continues to provide support. This is followed by support at 0.8735.
  • On the upside, the pair is testing the key 0.90 level. Will this line give way in the North American session? There is stronger resistance at 0.9119.
  • 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 Monday trading. This is not consistent with what we are seeing from the pair, which is trading quietly on Monday. AUD/USD ratio continues to have a majority of long positions, reflecting a trader bias towards the Aussie moving higher against the US currency.

The Australian dollar is trading close to 0.90 level. AUD/USD is steady in European trading.

AUD/USD Fundamentals

  • 14:00 US Flash Services PMI. Estimate 56.9 points.

*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.