Aussie Rally Continues As U.S. Posts More Mixed Numbers

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 |  Includes: CROC, DBV, FORX, FXA, GDAY, UDN, UDNT, USDU, UUP, UUPT
by: Dean Popplewell

By Kenny Fisher

AUD/USD continues to point upwards, as the Aussie has risen to the mid-92 range on Thursday. The Aussie continues to receive support from positive comments by RBA Governor Glenn Stevens on Wednesday. The currency has now climbed over 200 points in the past week. In Thursday's news, US Unemployment Claims continue to drop, but Pending Home Sales disappointed with its second decline in three readings. There are no Australian releases on Thursday.

US Unemployment Claims continue to impress. The key indicator dropped to 311,000, its lowest level in over three months. The estimate was 326,000, marking the fourth straight week that the reading has come in below the forecast. The news was not as good from Pending Home Sales, with a reading of -0.8%. This disappointed the markets, which had expected a small gain of 0.1%. Earlier in the week, New Home Sales also lost ground in February, and concern is bound to increase about the health of the U.S. housing industry.

RBA Governor Glenn Stevens gave an upbeat message on Wednesday and the Australian dollar has responded with gains. Stevens said that the economy has improved thanks to the lower exchange rate since last April and improved global economic conditions. Stevens reiterated that low interest rates are unlikely to rise in 2014, as the RBA tries to boost consumer spending and residential construction.

Ukraine's economy is in shambles as a result of the four-month political crisis. Prime Minister Arseniy Yatsenyuk acknowledged that the country is on the edge of bankruptcy, and GDP could drop by 3% this year. However, help is on the way. The IMF is set to sign a two-year loan of up to $18 billion, and the EU has offered a package of EUR 11 billion. Ukraine has already received two bailouts from the IMF since 2008, and will have to implement budget cuts and other measures in order to receive the new package from the IMF.

AUD/USD for Thursday, March 27, 2014

Forex Rate Graph 21/1/13

AUD/USD March 27 at 14:30 GMT

AUD/USD 0.9256 H: 0.9259 L: 0.9216

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9000 0.9119 0.9229 0.9361 0.9446 0.9542
Click to enlarge
  • AUD/USD continues to move higher on Thursday, which has been the trend throughout the week.
  • 0.9229 has switched to a support role as the Aussie remains on the move. This is a weak line which could see pressure during the day. Next, there is support at 0.9119.
  • 0.9361 is a strong resistance line.
  • Current range: 0.9229 to 0.9361

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000, 0.8893 and 0.8735
  • Above: 0.9361, 0.9466, 0.9542 and 0.9617

OANDA's Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Thursday. This is not consistent with what we are seeing from the pair as the Aussie continues to post gains. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias toward the Australian dollar continuing its rally against the US currency.

The Australian dollar continues to move higher. The US dollar remains under pressure early in the North American session.

AUD/USD Fundamentals

  • 12:30 US Unemployment Claims. Estimate 326K. Actual 311K.
  • 12:30 US FOMC Member Sandra Pianalto Speaks.
  • 12:30 US Final GDP. Estimate 2.7%. Actual 2.6%.
  • 12:30 US Final GDP Price Index. Estimate 1.6%. Actual 1.6%.
  • 14:00 US Pending Home Sales. Estimate +0.1%. Actual -0.8%.
  • 14:30 US Natural Gas Storage. Estimate -49B. Actual -57B.

*Key releases are highlighted in bold

*All release times are GMT