AUD/USD – Aussie Rebounds, Pushes Above 1.03

The Australian dollar has been losing ground for most of the week, but rebounded strongly in Thursday trading. The pair was trading in the low-1.03 range in the European session. Today’s highlight is US Unemployment Claims, and the markets will be hoping that this market-mover beats expectations. There are no Australian releases on Thursday.

The markets are watching carefully as the Bank of Japan meets for a policy meeting on Friday. This will  be just the second policy meeting under Governor Haruhiko Kuroda on Friday, who took over the position recently. Kuroda has introduced aggressive monetary easing steps, such as doubling quantitative easing, in an attempt to stamp out deflation, which has hobbled the Japanese economy for years. The BOJ is continuing with its aggressive monetary easing policy, but is not expected to announce new measures. The BOJ will also release its semi-annual outlook report, which will give analysts insight into the central bank’s take on inflation and other economic considerations.

Over in the US, the streak of weak key releases continues. Since late March, almost all key releases have missed expectations. The bad news continued on Wednesday, as Core Durable Goods declined by 1.4%. This was well below the estimate of a 0.5% gain. The markets are concerned about the pace and extent of the US recovery, and await the release of Unemployment Claims, one of the most important economic indicators, later today.

 There was little surprise that the G20 did not take Japan to task over its monetary policies, which have resulted in the yen taking a tumble. G20 final statements tend not to criticize its members, and this meeting was no exception. Although there has been a lot of criticism leveled against Japan, the G20 issued a very soft statement about currency devaluation which made no mention Japan, giving it a green light to continue its aggressive easing measures. Finance Minister Taro Aso has insisted that the measures are aimed at stamping out deflation, and the yen’s plunge is a “byproduct”. With the BOJ moving full steam ahead in its fight against deflation, traders can expect the Japanese currency to continue to weaken. This does not bode well for Australia, whose exports will have to compete with a shrinking yen, which has lost close to 20% of its value in the past 6 months.

 

AUD/USD for Thursday, April 25, 2013

Forex Rate Graph 21/1/13
 

AUD/USD April 25 at 11:45 GMT

1.0324 H: 1.0328 L: 1.0272

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
1.0174 1.0230 1.0298 1.0350 1.0424 1.0508

 

AUD/USD has pushed higher in Thursday trading. On the upside, the pair faces resistance at 1.0424. This is followed by resistance at 1.0508. The pair is receiving support at 1.0350.

Current range: 1.0230 to 1.0298

Further levels in both directions:

  • Below: 1.0298, 1.0230, 1.0174 and 1.0080
  • Above: 1.0350,  1.0424, 1.0508 and 1.0568

 

OANDA’s Open Position Ratios

The AUD/USD ratio remains quiet in Thursday trading. This is not reflected in the movement of the pair, as the Australian dollar has posted gains. If the pair continues to be active, we can expect the ratio to show an increase in activity.

AUD/USD is pointing upwards, and the pair has crossed above the 1.03 line. With the US releasing key employment data later in the day, we could see the pair continue to be active.

 

AUD/USD Fundamentals

  • 12:30 US Unemployment Claims. Estimate 352K
  • 14:00 US Treasury Secretary Jack Lew Speaks
  • 14:30 US Natural Gas Storage. Estimate 33B

 

*Key releases are highlighted in bold

*All release times are GMT

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.