AUD/USD

AUD/USD continues to struggle, as the pair trades in the low-0.89 range in Tuesday trading. These are the lowest levels we’ve seen for the Aussie since late August. The currency got no help from the RBA minutes, which stated that the RBA was maintaining the option to reduce interest rates. In other economic news, it was a good day for Australian releases, as the CB Leading Index and New Motor Vehicle Sales both climbed higher in November. Later on, RBA Governor Glenn Steven will testify before a parliamentary committee. In the US, today’s highlight is Core CPI.

The RBA minutes were released on Tuesday, and there wasn’t much good news as far as the Aussie was concerned. The Bank stated that a lower value for the currency would likely be required to “achieve balanced growth”. The RBA continues to try and “talk down” the Australian dollar, which has now shed about 12% of its value in 2013. The minutes noted that the RBA was maintaining interest rates but did not want to close off the possibility of a reduction if this could boost growth. Meanwhile, Australian releases looked solid, with the CB Leading Index gaining 0.5% and New Motor Vehicles climbing 1.8%, a five-month high. However, the positive news was not enough to prop up the struggling Australian dollar.

The markets are keeping a close watch on the US Federal Reserve, which meets for a two-day policy meeting starting on Tuesday. The million dollar question is whether the Fed will taper QE. Although there’s a stronger likelihood that the Fed will wait until after the new year, Bernard Bernanke’s swan song could surprise the markets if the Fed does take QE action this week. Currently, the Fed is purchasing $85 billion in assets every month, and a Fed taper will likely boost the US dollar against the major currencies.

There was some good news out of the US on the fiscal front, as the House of Representatives easily passed a budget deal on Thursday. The agreement, which will be voted on by the Senate this week, will remove the risk of a government shutdown and reduces the deficit by a modest $23 billion. Democrats and Republicans both had criticism of the proposal, but there is general agreement in Washington that the compromise reached is a positive step which removes some of the fiscal uncertainty we’ve seen in recent months.

AUD/USD for Tuesday, December 17, 2013

AUD/USD December 17 at 13:30 GMT

AUD/USD 0.8922 H: 0.8958 L: 0.8914

AUD/USD Technical

• AUD/USD is steady in Tuesday trading. The pair has been losing ground since late in the Asian session.
• The key level of 0.9000 continues to provide resistance. This is followed by a resistance line at 0.9119.
• On the downside, 0.8893 is providing support. This is followed by support at 0.8735, which has remained intact since July 2010.
• Current range: 0.8893 to 0.9000

Further levels in both directions:

• Below: 0.8893, 0.8735, 0.8658 and 0.8505
• Above: 0.9000, 0.9119, 0.9229, 0.9305 and 0.9400

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged in Tuesday trading. This is reflected in the current movement of the pair, which is showing very little activity. The ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar moving higher.

The Australian dollar is trading quietly in the low-0.89 range on Tuesday. With the US releasing key inflation numbers later in the day, we could see some movement from the pair during the North American session.

AUD/USD Fundamentals

• 00:30 RBA Monetary Policy Meeting Minutes.
• 00:30 Australian New Motor Vehicle Sales. Actual 1.8%.
• 1:30 Australian Mid-Year Economic and Fiscal Outlook.
• 13:30 US Core CPI. Estimate 0.1%.
• 13:30 US CPI. Estimate 0.1%.
• 13:30 US Current Account. Estimate -101B.
• 15:00 US NAHB Housing Market Index. Estimate 55 points.
• 22:30 RBA Governor Glenn Stevens Speaks.

*Key releases are highlighted in bold

*All release times are GMT