AUD/USD – Will the fundamental fury sustain?
May 29, 2014 in Forex Analysis
Australian dollar jumped up very strongly in the Asian morning session. AUD/USD saw a jump of 55 pips in the matter of minutes. Similarly AUD/JPY saw sudden buying to take it up by 50 pips all of a sudden.
The sudden burst of energy followed the economic release of month over month HIA new home sales from Australia. The release indicated a rise of 2.9% in the new home sales, while the previous release had shown a change of only 0.2%.
AUD/USD had lost the downward momentum ahead of 0.9202 support. The pair was moving in narrow range for a week. The support levels was just over the previous 0.9202, with the low of the recent range at 0.9208. The market was just waiting for a slight trigger to decide on the direction. And well, the new home sales release provided that.
What to expect?
The above daily chart indicates that the currency pair is not yet out of the red. It is still within the range and just below the resistances of 22-day and 55-day EMAs.
Just 30 minutes after another economic data for private capital expenditure came out from Australia. The previous release had shown a drop of -4.5%, the economists were expecting better results and the market consensus were to see a drop of -1.4%. The data was rather disappointing with a drop of -4.2%.
The bearish release which followed the previous bullish release has already neutralize the changed sentiments. The possibilities of some further gains because of the gained momentum can not be ruled out. However, even if the immediate resistances are taken out, the possibilities of another fall from around 0.9340 will remain in place.