AUD/USD – Aussie Steady as Chinese Manufacturing Data Almost Unchanged

The Australian dollar is stable on Tuesday, as AUD/USD trades in the high-0.88 range early in the North American session. The Aussie has had a miserable September, giving up a staggering 450 points to the US dollar. On the release front, there are no Australian releases on Tuesday. Chinese Manufacturing PMI came in at 50.5 points, almost unchanged from the previous release. In the US, HPI slipped to 0.1%, while the Richmond Manufacturing Index posted an excellent reading of 14 points, marking a 13-month high.

The Aussie is often sensitive to key Chinese data, as China is the Australia’s number one trading partner. Chinese Manufacturing PMI continues to trade just above the 50 line, which separates between expansion and contraction. The index came in at 50.5 points, above the estimate of 50.0 points. An expanding Chinese manufacturing sector bodes well for the Australian export sector as well as the Australian dollar.

US Existing Home Sales didn’t impress in August, slipping to 5.05 million, compared to 5.15 million in the previous release. This was way off the estimate of 5.21 million. The indicator had exceeded the estimate in the past three releases, so the weak numbers disappointed the markets. We’ll get a look at New Home Sales on Wednesday.

The US economy may be much more robust than that of the Eurozone, but it is also grappling with weak inflation levels. CPI, the primary gauge of consumer inflation, came in at -0.2%, its first drop since October. The estimate stood at +0.1%. Core CPI followed suit with a flat reading of 0.0%. This was the first time the index failed to post a gain since October 2010. The weak numbers follow disappointing manufacturing inflation data. PPI, a key event, dipped to just 0.0%, a 3-month low. The estimate stood at 0.1%. Core PPI slipped to 0.1%, down from 0.2% a month earlier. This matched the forecast. Low inflation levels could delay the Federal Reserve’s plan to raise interest rates, which is widely expected to take place in the first half of 2015.

AUD/USD for Tuesday, September 23, 2014

AUD/USD September 23 at 13:50 GMT

AUD/USD 0.8867 H: 0.8927 L: 0.8861

AUD/USD Technical

• AUD/USD edged higher in the Asian session but then retracted. The pair then moved higher in the European session but has reversed directions and continues to move lower.
• 0.8820 is am immediate support line. 0.8763 is stronger.
• 0.8953 is a strong resistance line.
• Current range: 0.8820 to 0.8953

Further levels in both directions:

• Below: 0.8820, 0.8763, 0.8668 and 0.8550
• Above: 0.8953, 0.9020, 0.9119, 0.9229 and 0.9361

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Tuesday, continuing the trend we saw a day earlier. This is consistent with the pair’s movement, as the Aussie has posted small losses. The ratio has a majority of long positions, indicative of trader bias towards the Aussie moving to higher ground.

AUD/USD Fundamentals

• 1:45 Chinese Flash Manufacturing PMI. Estimate 50.5 points. Actual 50.0 points.
• 13:00 US HPI. Estimate 0.4%. Actual 0.1%.
• 13:20 US FOMC Member Jerome Powell Speaks.
• 13:45 US Flash Manufacturing PMI. Estimate 58.1 points. Actual 57.9 points.
• 13:59 US Richmond Manufacturing Index. Estimate 10 points. Actual 14 points.
• 18:00 US FOMC Member Narayana Kocherlakota Speaks.

* 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.