AUD/USD – Aussie Gains As Business Confidence Improves

The Australian dollar continues to post gains on Tuesday and is trading at the 0.88 line. The currency has looked sharp so far this week, gaining about one cent against the US dollar since Monday. In economic news, Australian CB Leading Index posted a weak gain of 0.2%. NAB Business Confidence improved to 6 points, a three-month high. The MI Leading Index will be released later on Tuesday. In the US, there are two key events on the schedule – Core Durable Goods Orders and CB Consumer Confidence.

There was some good news out of Australia, as NAB Business Confidence, a key event, improved to 6 points in December, up from 5 points a month earlier. CB Leading Indicators failed to keep pace, dropping to just 0.2%, down from a 0.5% gain in November. The strong Business Confidence release has given the Aussie a boost, as it recovered most of last week’s losses courtesy of the US dollar.

The US housing sector continues to post worrying numbers. New Home Sales dropped sharply to 414 thousand, down from 464 thousand a month earlier. This was nowhere near the estimate of 457 thousand. This follows a disappointing Existing Home Sales release last week. The key indicator dropped to 4.87 million, down from 4.90 million a month earlier and shy of the estimate of the 4.94 million. This was the indicator’s fourth straight drop. The markets will be hoping for better news from Pending Home Sales on Thursday. A third straight housing reading below the estimate could weigh on the dollar.

AUD/USD for Tuesday, January 28, 2014

AUD/USD January 28 at 13:50 GMT

AUD/USD 0.8800 H: 0.8821 L: 0.8730

AUD/USD Technical

• AUD/USD continues to post gains in Tuesday trading. The pair crossed above the 0.88 line earlier in the European session.
• 0.8735 is providing support. This line has strengthened as the pair trades at higher levels. This is followed by support at 0.8658.
• 0.8893 is the next resistance line. It is followed by resistance at the key level of 0.9000.
• Current range: 0.8735 to 0.8893

Further levels in both directions:

• Below: 0.8735, 0.8658, 0.8505, 0.8425 and 0.8363
• Above: 0.8893, 0.9000, 0.9119 and 0.9229

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions in Tuesday trading. This is not consistent with what we are seeing from the pair, as the Australian dollar continues to post gains. AUD/USD ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar continuing to move higher against the US currency.

The Aussie continues to make gains against the US dollar. With the US releasing key manufacturing and consumer confidence data, we could see some movement from the pair during the North American session.

AUD/USD Fundamentals

• 00:30 Australian NAB Business Confidence. Actual 6 points.
• 13:30 US Core Durable Goods Orders. Estimate 0.7%.
• 13:30 US Durable Goods Orders. Estimate 1.9%.
• 14:00 US S&P/CS Composite-20 HPI. Estimate 13.7%.
• 15:00 US CB Consumer Confidence. Estimate 78.3 points.
• 15:00 US Richmond Manufacturing Index. Estimate 13 points.
• 23:30 Australian MI Leading Index.

*Key releases are highlighted in bold

*All release times are GMT

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