AUD/USD Nov. 3 – Flirt With Parity Before QE2

AUD/USD is playing around with parity, hours before the long-awaited QEII decision in the US. Will the Aussie enjoy US weakness and settle at the uncharted zone?  Here’s a quick update on technicals, fundamentals and community trends.

AUD to USD just under parity, at 0.9996.

AUD/USD Technicals

• Asian session:  AUD/USD dropped to 0.9960 before recovering – narrow range.
• Current Range between 0.9960 to 1.
• Further levels in both directions: Below 0.9960, 0.9915, 0.9850, 0.9750, 0.9669. Above, parity, 1.0023, 1.02, 1.03.
• 0.9660 is the strongest line, holding the Aussie again and again.
• AUD/USD needs to convincingly win parity before moving to further levels.

AUD/USD Fundamentals

All times are GMT. Most important events emphasized.

• 00:30 Australian Building Approvals. Exp. +0.3%. Actual -6.6%. Disappointment shrugged off by Aussie.
• 12:30 US ADP Non-Farm Payrolls. Exp. +21K.
• 14:00 ISM Non-Manufacturing PMI. Exp. 53.5 points. Important Hint for NFP on Friday.
• 14:00 Factory Orders. Exp. +1.3%.
• 18:15 QE2 Decision. One of the most important events of the year. The size of quantitative easing and the wording of the FOMC Statement will rock the markets for many days.
• 21:45 New Zealand Employment Change. Exp. +0.5%. This important figure from its neighbor has an impact on Australia as well.

AUD/USD Sentiment

• The surprising rate hike in Australia gave a boost to the Aussie, and its better positioned for a rise.
• Chinese growth continues to be an important theme for Australia.
• The inevitable second round of quantitative easing in the US is a done deal, but will probably be of a lesser scale than thought earlier. A huge QE2 will send the Euro higher. A weak one will boost the dollar. Volatility will remain high for a long time.
• Currensee Community: 68% are short, 32% are long. 373 open positions in real accounts trading this pair at the moment. Is the community seeing strong resistance at parity?

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..