Over the last week or so the Australian dollar made numerous attempts at the resistance level at 0.82 only to be sent back often before finally finishing last week moving through this key level. In doing so it was able to reach a one month high near 0.83 before being sold back down again towards 0.82 where it is presently falling back below. For most of the last month over the Christmas / New Year period, the Australian dollar seemed to have been content with trading in a narrow range below the resistance at 0.82, which continues to remain a key level as it is presently provides resistance. It was only a week ago that the Australian dollar drifted lower to another new multi-year low near 0.8030. The Australian dollar experienced a disappointing November and December moving from resistance around 0.88 down to the new lows recently.
For a couple of months from September through to November, the Australian dollar did well to stop the bleeding and trade within a range between 0.8650 and 0.88 after experiencing a sharp decline throughout September which saw it move from close to 0.94 down to below 0.8650. Back at the beginning of September the Australian dollar showed some positive signs as it surged higher again bouncing off support below 0.93 and reaching a new four week high around 0.94 however that all now seems a distant memory.
The Australian dollar reached a three week high just shy of 0.9480 at the end of July after it enjoyed a solid period which saw it surge higher through the resistance level at 0.9425 to the three week around 0.9480, before easing back towards that level. The Australian dollar enjoyed a solid surge higher reaching a new eight month high above 0.95 at the end of June, only to return most of its gains in very quick time to finish out that week. Since the middle of June the Australian dollar has made repeated attempts to break through the resistance level around 0.9425, however despite its best efforts it was rejected every time as the key level continued to stand tall, even though it has allowed the small excursion to above 0.95.
A private gauge of Australian inflation braked to the slowest pace in two-and-a-half years in December as petrol prices plunged, suggesting there was expanding scope for another cut in interest rates if needed to support the economy. The TD Securities-Melbourne Institute’s monthly measure of consumer prices was unchanged in December from November, when it edged up by 0.1 percent. December is normally a strong month for prices but this time a steep fall in petrol kept inflation restrained. The annual pace slowed sharply to 1.5 percent, from 2.2 percent in November. That was the lowest reading since July 2012. Importantly for monetary policy, measures of underlying inflation also showed a marked moderation in price pressures, with the trimmed mean up just 1.7 percent on a year earlier and down from 2.4 percent in November. The Reserve Bank of Australia (RBA) focuses on underlying inflation when setting interest rates, aiming to keep it in a range of 2 to 3 percent over the long run. The slowdown in the TDMI figures will thus only add to market speculation about a cut in the current 2.5 percent cash rate. Interbank futures <0#YIB:> are fully priced for a move by May, though they imply only a slight chance of an easing at the RBA’s next policy meeting on Feb. 3.
AUD/USD January 20 at 21:55 GMT 0.8166 H: 0.8218 L: 0.8160
AUD/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 0.8100 | — | — | 0.8200 | 0.8650 | 0.8800 |
During the early hours of the Asian trading session on Wednesday, the AUD/USD is easing back below the key 0.82 level after remaining quite flat for the last few days. This was after enjoying a solid move back to that level last week. Current range: trading right below 0.8200 around 0.8170.
