To finish off last week, the AUD/USD moved up towards the 0.93 level again as it recovered some of the lost ground from earlier in the week. However in the last couple of days it has fallen sharply and moved back to within reach of the long term support level at 0.90.
This level will be called upon as there are no obvious support levels below 0.90 to prop it up should it fall through. Last week it did very well to maintain its price level well above 0.92 as it placed upward buying pressure on the resistance level at 0.93 however earlier last week, it fell sharply to back under 0.92 and started to place pressure on the short term support level of 0.9150. After finding solid support at 0.90 a couple of weeks ago, it did well to rally moving up above 0.92 for the first time in nearly a week and getting to within a whisker of 0.93 again. The 0.93 level has provided reasonable resistance to any movement higher just like it did a few weeks ago and has done so again throughout last week. This level will likely play a role again should the AUD/USD rally up from near 0.90. To finish a few weeks ago, it dropped sharply again to resume its medium term down trend as it moved down towards the key long term level of 90 cents. It surged higher to within a whisker of the 93 cents level before falling away to close out the week.
The 0.9150 level had become a key level over the short term providing both some resistance and more recently support, and this was called upon again last week providing some much needed support however it was completely ignored the last day or so as the AUD/USD fell heavily through it. It was only a few weeks ago that many were waiting for the AUD/USD to break below the 90 cents level and then it would have been a matter of how far can it drop. It had continued to drift lower and move towards the 90 cents level, a level not seen for three years. Considering the speed of its decline over the last few months, the last month or so has seen a significant slowing down and almost some consolidation as it has rested well on the support at 0.90 and made its way back to 0.93 on a few occasions.
The last few months have seen the AUD/USD establish a strong medium term down trend with lower peaks and lower troughs, as it has moved from near 1.06 down to near 0.90 in that time. In doing so, it has completely ignored any likely support at either 1.04 or 1.0360, and more recently the long term support level at 0.97. Up until mid April, the Australian dollar was enjoying its best move higher since October and November last year. After making a solid run higher in the middle of June back towards the key level of 0.97, the AUD/USD has since continued its strong and steady decline moving to within reach of 0.90 and levels not seen since near the middle of 2010. This has seen it experience a significant strong trend that would have caught many people on the wrong side of.
AUD/USD dropped sharply after a very poor release from Australian Building Approvals. The key construction indicator posted a decline of -6.9%, its worst showing since December 2012. The weak release raises questions about the health of the construction and housing industries, both of which are important engines for economic growth. We’ll get a look at housing data later in the week, with the release of HIA New Home Sales. There was further pressure on the Aussie as RBA Governor Glenn Stevens hinted that there was further room for an interest rate reduction next week. Stevens complained about low business confidence, the end of the mining boom and even criticized the government for not providing a specific date for the election. This is not the first time that Stevens has made comments which have impacted on the currency markets. AUD/USD was down sharply, losing over one cent. 
AUD/USD July 31 at 01:45 GMT 0.9037 H: 0.9100 L: 0.9012
During the early hours of the Asian trading session on Wednesday, the AUD/USD is trying to hold on to its recent trading range above 0.9050 having just recently fallen further down towards 0.9020. Despite its slowing down the last few weeks, the Australian dollar has been in the middle of a free-fall, as the currency has lost around 13 cents since the beginning of May. In moving through to 1.0580 only a few months ago, it moved to its highest level since January. Current range: trading just below 0.9040.
Further levels in both directions:
• Below: 0.9000
• Above: 0.9300
(Shows the ratio of long vs. short positions held for the AUD/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The long position ratio for the AUD/USD has moved back above 70% as the Australian dollar has fallen heavily back towards 90 cents. The trader sentiment remains in favour of long positions.
Economic Releases
- 01:30 AU Private Sector Credit (Jun)
- 05:00 JP Construction orders (Jun)
- 05:00 JP Housing starts (Jun)
- 09:00 EU HICP (Flash) (Jul)
- 09:00 EU Unemployment (Jun)
- 12:15 US ADP Employment Survey (Jul)
- 12:30 CA GDP (May)
- 12:30 US Core PCE Price Index (Adv.) (Q2)
- 12:30 US Employment cost index (Q2)
- 12:30 US GDP Annualised (Adv.) (Q2)
- 12:30 US GDP Price Index (Adv.) (Q2)
- 13:45 US Chicago PMI (Jul)
- 18:00 US FOMC – Fed Funds Rate (Jul)