Australian dollar’s rate was growing on Thursday: it added over 0.28%. At the moment, 1 AUD costs 0.9416 USD.
‘Aussie’ has grown by 2% since the beginning of April in comparison to the USD. It happened after the release of the positive information about the Australian economy.
Positive news included improvement of the situation on the labor market. An unemployment level dropped from 6% to 5.8%.
Click on the picture to see full-size
Another factor that affected AUDUSD positively was the decision of the Reserve Bank of Australia to keep an interest rate at 2.5%.
However, we think that AUDUSD’s growth is almost over and that we will witness a serious technical correction in the nearest future. It is indicated by both fundamental and technical factors.
A slowdown of the economic activity in China and Japan, where Australia delivers almost 50% of its export, is a fundamental factor.
Click on the picture to see full-size
An annual value of Chinese import dropped by 11.3%, while experts were waiting for the 2.4% growth. Export from China has decreased by 6.6%, which also does not meet experts’ expectations of 4% growth.
Situation in Japan is not great either. A number of automotive orders dropped by 8.8% in March, while a decrease by 3% only was predicted.
Another factor that indicates a slowdown of both world trade and Chinese economy is a dynamics of Baltic Dry index. It shows the cost of the shipping rates of the major raw goods and is a leading indicator of the world trade condition.
Click on the picture to see full-size
The index breached a 2000 points threshold in the middle of December 2013 and then started to decrease. It got to the minimum of 1000 points in the first half of February 2014. AUD then dropped below 0.9000. Baltic Dry kept getting to the local maximums in the beginning of April, and it is possible that Australian dollar’s rate will start decreasing again.
Technical factors show that AUDUSD is locally overbought. Bearish divergence on H4 chart means that a trend will change soon. Technical indicators are going to give a signal to sell. Nearest downwards targets are located at 0.93600, 0.93000 and 0.92200.
Click on the picture to see full-size
Situation on the futures market doesn’t favor AUDUSD as well.
According to the report of the US Commodity Futures Trading Commission (Commitments of Traders), a net hedgers’ position (blue on the chart) kept decreasing and got to 6,118.00 contracts in the middle of last week. 87,769.00 contracts were opened in the middle of January 2013. Australian dollar has started to improve at the end of January as well.
A significant decrease of the net hedgers’ position shows that market participants are expecting a decrease of AUDUSD’s rate in the nearest future.
Click on the picture to see full-size
A relatively high level of the net large speculators’ positions (green on the chart) also indicates a soon decrease of AUDUSD.
Same situation took place in the middle of October 2013, when a long-term correction has started and lasted until the end of January 2014.
AUD can continue growing after the technical correction. Nearest resistance levels are located at 0.94500, 0.95200 and 0.96120.
- See more at: https://www.mayzus.com/economical-news/is-aussie-getting-ready-for-correction.html#sthash.1CD9aama.dpuf
‘Aussie’ has grown by 2% since the beginning of April in comparison to the USD. It happened after the release of the positive information about the Australian economy.
Positive news included improvement of the situation on the labor market. An unemployment level dropped from 6% to 5.8%.
Click on the picture to see full-size
Another factor that affected AUDUSD positively was the decision of the Reserve Bank of Australia to keep an interest rate at 2.5%.
However, we think that AUDUSD’s growth is almost over and that we will witness a serious technical correction in the nearest future. It is indicated by both fundamental and technical factors.
A slowdown of the economic activity in China and Japan, where Australia delivers almost 50% of its export, is a fundamental factor.
Click on the picture to see full-size
An annual value of Chinese import dropped by 11.3%, while experts were waiting for the 2.4% growth. Export from China has decreased by 6.6%, which also does not meet experts’ expectations of 4% growth.
Situation in Japan is not great either. A number of automotive orders dropped by 8.8% in March, while a decrease by 3% only was predicted.
Another factor that indicates a slowdown of both world trade and Chinese economy is a dynamics of Baltic Dry index. It shows the cost of the shipping rates of the major raw goods and is a leading indicator of the world trade condition.
Click on the picture to see full-size
The index breached a 2000 points threshold in the middle of December 2013 and then started to decrease. It got to the minimum of 1000 points in the first half of February 2014. AUD then dropped below 0.9000. Baltic Dry kept getting to the local maximums in the beginning of April, and it is possible that Australian dollar’s rate will start decreasing again.
Technical factors show that AUDUSD is locally overbought. Bearish divergence on H4 chart means that a trend will change soon. Technical indicators are going to give a signal to sell. Nearest downwards targets are located at 0.93600, 0.93000 and 0.92200.
Click on the picture to see full-size
Situation on the futures market doesn’t favor AUDUSD as well.
According to the report of the US Commodity Futures Trading Commission (Commitments of Traders), a net hedgers’ position (blue on the chart) kept decreasing and got to 6,118.00 contracts in the middle of last week. 87,769.00 contracts were opened in the middle of January 2013. Australian dollar has started to improve at the end of January as well.
A significant decrease of the net hedgers’ position shows that market participants are expecting a decrease of AUDUSD’s rate in the nearest future.
Click on the picture to see full-size
A relatively high level of the net large speculators’ positions (green on the chart) also indicates a soon decrease of AUDUSD.
Same situation took place in the middle of October 2013, when a long-term correction has started and lasted until the end of January 2014.
AUD can continue growing after the technical correction. Nearest resistance levels are located at 0.94500, 0.95200 and 0.96120.
- See more at: https://www.mayzus.com/economical-news/is-aussie-getting-ready-for-correction.html#sthash.1CD9aama.dpuf
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