AUD/USD - Aussie Drops Below 0.91 As U.S. Unemployment Claims Shine

By Kenny Fisher

The Australian dollar continues to point downwards in Wednesday trading. AUD/USD has dipped below the 0.91 line, its lowest level since early September.

The week started with on a sour note, as U.S. Pending Home Sales posted another decline. However, the tune was markedly different on Tuesday, as Building Permits pushed over the 1 million mark, hitting 1.03 million units. This was the highest level since June 2008 and beat the estimate of 0.94 million. The September release, which had been postponed due to the government shutdown last month, came in at 0.97 million, above the estimate of 0.94 million.

Low inflation indicators have been a major concern in Japan and the eurozone, and the U.S. economy is not immune from this problem. The Producer Price Index continues to look weak, posting a decline of 0.2% in October. This was the index’s second straight decline. Core CPI showed a weak gain of 0.1%, and CPI dipped to -0.1%. These weak numbers have raised concerns about the strength of the U.S. economy.

The RBA continues to try and "talk down" the Australian dollar, which the Bank says is impeding economic growth due to its high value. Senior officials at the RBA continue to hammer home this message, and did not mince words in last week's minutes, stating that "a lower level of the exchange rate would likely be needed to achieve balanced growth in the economy". The Aussie lost about two cents last week, but this may not be enough for the RBA, which wants to see the currency below the 0.90 level. Clearly, the Bank has been reluctant to take action and reduce interest rates, but the RBA has been dropping broad hints that this could change.

AUD/USD for Tuesday, November 26, 2013

AUD/USD November 26 at 14:05 GMT

AUD/USD 0.9105 H: 0.9204 L: 0.9104

AUD/USD Technical

S3	S2	S1	R1	R2	R3
0.8735	0.8893	0.9000	0.9119	0.9229	0.9305

• AUD/USD has posted sharp losses in Tuesday trading. The pair has dipped below the 0.91 line early in the North American session, its lowest level since early-September.


• The pair is receiving support at the key level of 0.9000. This is followed by a support level at 0.8893.


• AUD/USD is facing resistance at 0.9119. This is a weak line which could see activity during the day. This is followed by a resistance line at 0.9229.


• Current range: 0.9000 to 0.9119

Further levels in both directions:

• Below: 0.9000, 0.8893, 0.8735 and 0.8658


• Above: 0.9119, 0.9200, 0.9305, 0.9400 and 0.9508

OANDA's Open Positions Ratio

AUD/USD is unchanged in Tuesday trading, continuing the trend which began on Monday. This is not reflected in the current movement of the pair, as the Australian dollar has posted sharp losses. The ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar reversing directions and moving to higher ground.

The pair has moved lower following strong U.S. construction data. We could see more movement during the North American session, as the U.S. releases key consumer confidence numbers.

AUD/USD Fundamentals

• 13:30 U.S. Building Permits. Estimate 0.94M. Actual 1.03M.


• 13:30 September Data – U.S. Building Permits. Estimate 0.94M. Actual 0.97M.


• 14:00 U.S. S&P/CS Composite-20 HPI. Estimate 13.0%. Actual 13.3%.


• 14:00 U.S. HPI. Estimate 0.5%. Actual 0.3%.


• 15:00 U.S. CB Consumer Confidence. Estimate 72.2 points. Actual 70.4 points.


• 15:00 U.S. Richmond Manufacturing Index. Estimate 3 points. Actual 13 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.

Source: AUD/USD - Aussie Drops Below 0.91 As U.S. Unemployment Claims Shine

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