AUD/USD – Aussie Drifting Ahead of Key US Data

The Australian dollar is trading quietly on Friday, as AUD/USD is trading in the mid-0.89 range. In economic news, Australian Private Sector Credit showed little change, posting a gain of 0.4%. Over in the US, there’s plenty of action before the weekend, with three key releases – Preliminary GDP, Chicago PMI, and Pending Home Sales.

Australian releases have not had an impressive week. Private Capital Expenditure fell by 5.2%, its sharpest drop since April 2009. The reading was much worse than expected, with the estimate standing at -1.0%. This dismal figure comes on the heels of Construction Work Done, which dropped by 1.0%, its fourth decline in five months. The weak numbers certainly were of no help to the Aussie, which has given up close to a cent since Tuesday and finds itself back below the 0.90 level.

Federal Reserve Chair Janet Yellen testified on Thursday before a Senate committee. As expected, Yellen said that the Fed remains committed to tapering QE and would like to wind up the bond-buying scheme by the fall. At the same time, she acknowledged the string of weak US releases recently and said that the Fed would closely monitor to what extent the weak numbers are due to cold weather and what portion can be attributed to a “softer outlook”. The next Fed policy meeting takes place in mid-March and the markets will be expecting another $10 billion cut to QE.

Thursday was a mix for US key releases. Manufacturing data looked strong, as Core Durable Goods Orders jumped 1.1% in January. This surprised the markets, which had expected a decline of -0.1%. However, Unemployment Claims did not look as sharp, as the key indicator rose to 348 thousand, well above the estimate of 333 thousand. Meanwhile, a nasty streak of weak US releases ended on Wednesday as New Home Sales jumped by 468 thousand, crushing the estimate of 406 thousand. It was the housing indicator’s best showing since last June, and helped allay concerns about the health of the housing sector, following weak housing numbers last week. We’ll get another look at key housing data on Friday, with the release of  Pending Home Sales. The markets anticipate a strong gain after a miserable reading in December.

AUD/USD for Friday, February 28, 2014

AUD/USD February 28 at 11:20 GMT

AUD/USD 0.8959 H: 0.8990 L: 0.8939

AUD/USD Technical

• AUD/USD is listless in Friday trading. The pair touched a high of 0.8990 early in the Asian session but was unable to challenge the key 0.90 level.
• 0.9000 continues to provide resistance, but is not a strong line. 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 has changed directions on Friday, pointing to gains in short positions. This is not consistent with what we are seeing from the pair, which is showing very little movement. 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 continues to trade below the 0.90 line and is drifting in the European session.

AUD/USD Fundamentals

• 00:30 Australian Private Sector Credit. Estimate 0.5%. Actual 0.4%.
• 13:30 US Preliminary GDP. Exp. 2.6%.
• 13:30 US Preliminary GDP Price Index. Exp. 1.3%.
• 14:45 US Chicago PMI. Exp. 57.9 points.
• 14:55 US Revised UoM Consumer Sentiment. Exp. 81.4 points.
• 14:55 US Revised UoM Inflation Expectations.
• 15:00 US Pending Home Sales. Exp. 2.9%.
• 15:15 US FOMC Member Narayana Kocherlakota Speaks.
• 15:15 US FOMC Member Jeremy Stein Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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