FX News – Jan 15 2014: AUD Slides VS USD, May Bottom Out at 0.86 at Year-End

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A combination of a weak aussie and a greenback that's gaining momentum led a to a slide in the AUD/USD pair. The decline began around the middle of yesterday's session and has so far continued to this day. This dragged the pair back to under 0.9000 after enjoying a few days above that level.

The US posted positive retail sales data, which helped boost the greenback against the aussie and other major currencies. In December, total retail sales rose by 0.2%, while a growth of 0.7% was seen excluding auto sales.

Meanwhile, retail sales increased by 4.1% over the past 12 months, and by 3.7% excluding auto sales during the same period.

On the flipside, auto sales fell by 1.9% compared to the previous month.

At the opening of today's session, the AUD/USD pair tried to make a comeback at the 0.9000 area, but only got as far as 0.8970. It then took a further slide from there. It is currently trading at 0.8925, with initial resistance seen at 0.9012, followed by 0.9034. Meanwhile, initial support is at 0.8901 followed by 0.8879.

According to HSBC, much of the weakening of the aussie against the greenback is over. They see the pair bottoming out at the 0.8600 area by the end of the year.

Aside from the positive performance of the greenback, poor Japanese trade data led to a rise in the value of the USD/JPY pair. Japan posted a massive current account deficit worth 592.8 billion yen.

After spending the past few days at the 103.00 area, it climbed back to the 104.00 zone in today's Asian session. The pair is currently trading at 104.42, with initial resistance seen at 104.97, followed by 105.23. Meanwhile, initial support is at 103.55, followed by 103.29.

The EUR/USD had the same story as the previous pairs, as it slid at the opening of today's session. The decline was less dramatic, however, since the pair only lost less than 50 pips at the moment. It is currently trading at 1.3642, with initial resistance seen at 1.3717, followed by 1.3751. Meanwhile, initial support is at 1.3665, followed by 1.3630.

By FX Strategy Team, Published on 15th of January 2014
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