AUDUSD choppy for the month

The AUDUSD pair has been extremely volatile for the month of April making the 18 months high for the month. AUD started rising at 0.9150 for the month reached at the high of 0.9386 (18 Month’s High) currently trading at 0.9386. This month’s Reserve Bank of Australia (RBA) decision to increase the rate hike to combat the inflation was in expected lines for the AUD. The contribution to the volatility was the Goldman Sachs storm which had an impact on the currency pair inline with other majors. On the other hand the Australia’s Westpac’s leading economic indicator rose highest in 1 //2 years from 0.4% to expected figure of 0.5%. The Australian Producer’s price Index which is a leading indicator of Consumer Inflation was expected at 0.7% but came out at 1% from the previous figure of -0.4%. The Australian Central bank’s Governor Glenn Stevens indication on interest rate hike could be on the cards which could be worrisome for the inflation ridden economy. But the RBA’s confidence on the strong Asian partner China, which is the largest importer of its mining activities could boost further trading activities for the economy.

From the technical perspective, the pair seems to be nearing the support with Relative Strength Index (RSI) approaching 30 and could be good point of comeback for the pair. On the Fibonacci level’s it has currently been trading at more than 50.00% of the upward movement, if it breaks the 61.8% level 0.9222, there could be further downside in the pair with next support at .098162. The Australian Consumer Price Index, New Home Sales data and the Private Sector Credit could determine the further move for the currency pair.

Mohammed Rabbani

AUD recovers after a correction against the USD

The AUD slipped against the US Dollar from the 4 month high since Nov 2009. The drop was driven by the government home loans data which fell more that expected falling to 1.8% from previous figure of 7.3%. The Reserve Bank of Australia (RBA) also raised the interest Cash Rate for the fifth consecutive time from 4% to 4.25%. The rate hike was not a surprise for the investors, however, this the rate is building pressure on the first time home buyers. The RBA rate hike has been a measure to control inflation. The increase in demand for the Australian minerals like coal and iron ore can also play a positive role in Australia’s growth strategy. The Australian unemployment rates were also inline with the markets expectations at 5.3% without change to the previous figures. The rise in dollar rate can also be attributed to the stable addition of jobs which supplemented to 19,600K but could not upbeat the market expectation which was at 20,100.

From the Technical point of view, the AUD has covered 61.8 % of the upward movement since Monday’s fall from 0.9386 against the US dollar. On the near term if it breaks the resistance at 0.9370, the further resistance could be at 0.9402. The downside support could be at 0.9214. As the week does not bring major fundamental news for the AUD, the building permits data for the USD could have some impact on the Australian dollar.

Mohammed Rabbani

Oil steady at 18 months high

Oil prices rose to 18 months high touching $86.30 for the day. The US Institute for Supply Management’s Index of Non-Manufacturing businesses rose to 55.4 from the expected figure of 54.1. The pending home sales for the month also jumped to 8.2% from the expected figure of -0.5% which shows clear sign of US recovery. The US Consumer Confidence Index also rose from 46.4 to 52.5 beyond the expectation of 50.1 which infuses the confidence of more consumption of petroleum products. The indicators reflect the revival taking place in the US economy.

The ADP Non-Farm Employment figure Shed 23000 jobs whereas it was expected to gain 40000 jobs for the month of march which is again concern for the US recovery. The initial jobless claims also decreased by 6000 from 445,000 to 439,000 beating expectation which was at 440,000. On Friday, the US Labor Department said employers had created 162,000 new jobs in March, the highest monthly number since March 2007 which again a positive news for the US economy.

The recent indicators reflect the steady and more positive recovery coming for the global economy which can improve the oil consumptions. The US crude oil inventories also showed a sharp fall from 7.3m barrels to 2.9m barrels however above expectation of 2.4m Barrels. Other reasons for the commodities price rise is the European Union’s bailout plan for Greece which again can boost consumption overall. The Weak dollar is also contributing towards the commodity price rise.

From the technical point of view, it has broken the resistance of 82.84. The next resistance can be at 92.15 as it has crossed the 38% of the upward movement. On the downside the 75.03 can be the support for the month, if it goes below then support can be placed at its can go up to 70.83.The US Crude oil inventory data and the unemployment data to be released today should be watched out which could direction on the rising oil prices. The Monetary Policy Committee (MPC) and the Bank of England’s (BOE) Interest rate statement for GBP which is expected to boost the GBP currency can also be a gain for the overall consumption.

Mohammed Rabbani