Seeking Alpha
Currencies, macro, fixed income
Profile| Send Message|
( followers)  

By Kenny Fisher

The Australian dollar is showing little change on Tuesday, as AUD/USD trades in the mid-0.89 range. As expected, the RBA held interest rates at 2.50%, while Building Permits posted an excellent gain after three straight declines. It's a quiet day in the US, with just one minor release on the schedule.

The RBA opted to keep a steady course and maintain interest rates at 2.50%, which they have been since August. The Bank said that current low rates were likely to remain low for some time and also took a shot at the high value of the Australian dollar. Governor Glenn Stevens stated that the currency remains "high by historical standards.” The RBA has said in the past that it would like to see the Aussie closer to the 85 level, so we're likely to see the central bank continue to "talk down" the currency. Meanwhile, Building Permits, a key release, posted a sharp gain of 6.8%, crushing the estimate of 0.7%. The volatile indicator broke a streak of three straight declines.

After a less than stellar week, US releases started the new trading week on a positive note. ISM Manufacturing PMI improved to 53.2 points in January, beating the estimate of 52.3. On Friday, Pending Home Sales posted a paltry gain of 0.1%, well below the estimate of a 2.9% gain. However, the reading was a strong improvement over the January reading of -8.7%. Earlier in the week, Unemployment Claims came in above the estimate and GDP also missed the forecast. Although market sentiment remains positive about the US economy, recent key releases have not impressed, and the dollar will find itself under pressure this week if US numbers don't show improvement.

AUD/USD for Tuesday, March 4, 2014

Forex Rate Graph 21/1/13

AUD/USD March 4 at 14:15 GMT

AUD/USD 0.8948 H: 0.8969 L: 0.8910

AUD/USD Technical

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

  • AUD/USD has edged higher in Tuesday trading. The pair dropped to a low of 0.8905 in the Asian session.
  • The key barrier of 0.9000 continues to provide resistance. This is followed by resistance at 0.9119.
  • 0.8893 is providing support. The next support line is 0.8735, which has remained intact since early February.
  • 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 continues the movement we saw on Monday, pointing to gains in short positions. This is not consistent with what we are seeing from the pair, as the Aussie has edged higher. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias towards the Australian dollar moving higher against the US currency.

AUD/USD is trading in the mid-0.89 range. The pair is steady in the European session.

AUD/USD Fundamentals

  • 00:30 Australian Building Approvals. Estimate 6.8%. Actual 0.7%.
  • 00:30 Australian Current Account. Estimate -$10.1B. Actual -$10.1B.
  • 3:30 Australian Cash Rate. Estimate 2.50%. Actual 2.50%.
  • 3:30 Australian RBA Rate Statement.
  • 15:00 US IBP/TIPP Economic Optimism. Estimate 45.6 points.
  • 22:30 Australian AIG Services Index.

*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.

Source: AUD/USD - Little Change As RBA Holds Rates