AUD/USD – Higher As Markets Eye RBA Minutes

AUD/USD has gained some ground in Monday trading, as the pair trades slightly below the 0.91 line. In economic news, Australian New Motor Vehicle Sales posted a small gain, bouncing back from a sharp decline in January. In the US, the Empire State Manufacturing Index improved in February, but fell short of the estimate. The RBA will release its minutes early on Tuesday.

Australian New Motor Vehicle Sales, an important gauge of consumer spending, certainly didn’t dazzle with a gain of just 0.1%. However, this was a marked improvement from the previous release, which came in at -3.5%. On Friday, there was excellent news as Employment Change sparkled, posting its best performance in ten months. We could see some activity from AUD/USD early on Tuesday, as the RBA releases minutes of its previous policy meeting. It’s a good bet that the minutes will contain references about the Aussie being overvalued, which has been a constant sentiment of the central bank, which views a strong currency as an impediment to an economic recovery.

It’s being described as the worst crisis on the European continent since the end of the Cold War. On Sunday, Crimea, a southern region of the Ukraine, voted overwhelmingly to leave the Ukraine and join Russia. The results brought joy to most residents of Crimea, who are of Russian ethnicity. However, the vote has been sharply denounced by the EU and the US as illegal, and both have warned Russia against annexing the region. Western nations are expected to impose stiff sanctions if Russia does not step back and respect Ukrainian sovereignty, but Moscow has not given any indication of backing down. The standoff between East and West is likely to get worse, and the turmoil could well affect the markets this week.

In the US, concerns about the job market eased after a solid Unemployment Claims release on Thursday. The key indicator dropped to 315 thousand, down from 323 thousand the previous week. This beat the estimate of 334 thousand and marked a three-month low. Core Retail Sales and Retail Sales both posted gains of 0.3%, which were within market expectations. These indicators are the primary gauges of consumer spending, and although the gains were modest, they mark an improvement over the January readings.

AUD/USD for Monday, March 17, 2014

AUD/USD March 17 at 13:35 GMT

AUD/USD 0.9080 H: 0.9088 L: 0.9010

AUD/USD Technical

• AUD/USD has moved higher in Monday trade. The pair touched a high of 0.9088 earlier in the European session.
• 0.9000 continues to provide support. This is followed by support at 0.8893.
• 0.9119 is the first line of resistance. This line has weakened with the Aussie moving higher and could face pressure during the day. There is stronger resistance at 0.9229.
• Current range: 0.9000 to 0.9119

Further levels in both directions:

• Below: 0.9000, 0.8893, 0.8735, 0.8658 and 0.8565
• Above: 0.9119, 0.9229, 0.9361 and 0.9466

OANDA’s Open Positions Ratio

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

The Australian dollar has edged higher in the European session. We could see AUD/USD push into 0.91 territory during the day.

AUD/USD Fundamentals

• 00:30 Australian New Motor Vehicle Sales. Actual 0.1%.
• 12:30 US Empire State Manufacturing Index. Estimate 6.6 points. Actual 5.6 points.
• 13:15 US Capacity Utilization Rate. Estimate 78.7%. Actual 78.8%.
• 13:15 US Industrial Production. Estimate 0.2%. Actual 0.6%.
• 14:00 US NAHB Housing Market. Estimate 50 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.