AUD/USD – Steady as Markets Eye Key US Releases

The Australian dollar continues to roll, after posting outstanding gains in Thursday trading. AUD/USD jumped about 140 points following employment data which beat expectations. The Aussie continues to move higher on Friday, and crossed above the 0.96 line in the European session. The trading week wraps up with two key releases out of the US - PPI and UoM Consumer Sentiment. There are no Australian releases on Friday.

After dropping close to 3-year lows, the Australian dollar is showing some life, thanks to some positive key domestic releases this week. Westpac Consumer Sentiment recorded a four-month high, with a strong gain of 4.7%. On Thursday, Employment Change posted a modest gain of 1.1 thousand, blowing past the estimate of -9.8 thousand. The Unemployment Rate remained unchanged at 5.5%, slightly better than the forecast of 5.6%. The Australian dollar has taken advantage of these readings and has gained about two cents this week.

There was good news on Thursday from US releases, as all three key events beat expectations. Retail Sales jumped from 0.1% to 0.6%, surpassing the estimate of 0.4%. Core Retail Sales also climbed nicely, from -0.1% to 0.3%. This matched the market forecast. Unemployment Claims fell to 334 thousand, crushing the estimate of 354 thousand. If Friday's consumer confidence and inflation readings beat market expectations, we could see the US dollar move higher.

The solid US releases could affect the US Federal Reserve’s QE program, which involves the purchase of $85 billion in assets each month. The Fed has said that it won’t scale back the program before it sees a stronger economy and an improving employment picture. Although US releases continue to be mixed, speculation is rising that the Fed could take action in the next few months. Since QE is US dollar-negative, any tapering of QE could give a boost to the greenback against the major currencies.

 

AUD/USD for Friday, June 14, 2013

Forex Rate Graph 21/1/13
 

AUD/USD June 14 at 11:50 GMT

AUD/USD 0.9624 H: 0.9631 L: 0.9568

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9328 0.9405 0.9541 0.9651 0.9727 0.9795

 

After sharp gains on Thursday, AUD/USD has settled down. On the upside, the pair continues to face resistance at 0.9651. This is not a strong line, and could be tested if the Australian dollar continues its strong upward move. This is followed by resistance at 0.9727. On the downside, the pair is receiving support at 0.9541. This line has strengthened as the pair trades at higher levels. The next support line is at 0.9405, protecting the 0.94 level.

Current range: 0.9541 to 0.9651

 

Further levels in both directions:

  • Below: 0.9541, 0.9405, 0.9328, 0.9221, 0.9135 and 0.9071
  • Above: 0.9651, 0.9727, 0.9795 and 0.9842

 

OANDA's Open Positions Ratio

AUD/USD ratio has switched directions, and is pointing to movement towards short positions in the Friday session. This is not currently reflected in the current movement of the pair, as the Aussie has moved higher against the US dollar. Long positions continue to make up most of the ratio, indicating that trader sentiment is strongly biased towards the Australian dollar continuing to push higher.

The Australian dollar has enjoyed a banner week, thanks to some solid domestic releases. We could see more activity from the pair, as the US releases more key numbers later in the day.

AUD/USD Fundamentals

  • 12:30 US PPI. Estimate 0.1%.
  • 12:30 US Core PPI. Estimate 0.1%.
  • 12:30 US Current Account. Estimate -110B.
  • 13:00 US TIC Long-Term Purchases. Estimate 35.0B.
  • 13:15 US Capacity Utilization Rate. Estimate 77.9%.
  • 13:15 US Industrial Production. Estimate 0.3%.
  • 13:55 US Preliminary UoM Consumer Sentiment. Estimate 84.9 points.
  • 13:55 US Preliminary UoM Inflation Expectations.

 

*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.

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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.