AUD/USD Commodity Prices Seesaw Dragging Aussie Down to 0.9110

After enjoying a commodity boost the AUD/USD the pair threatened to overtake the 0.92 level. The overall positive global growth numbers along the geopolitical issues in Egypt had given a boost to commodities. The Aussie benefited from the improved data out of China as the final destination of its exports. This was during the Asian session and before the US data releases.

US Data was mixed. US unemployment claims came in slightly below expectations at 320K. There were no overall changes to the CPI numbers which mean inflation in the US is still under the Fed target. Manufacturing was weaker and the US suffered a bigger outflow of investment in July. This mixed bag had the market trying to make sense of the data. The big driver lately has been employment as the Fed’s tapering depends on a unemployment rate reduction to trigger the end of QE. The claims while not necessarily good left room for optimism as they came just below the 335K forecast.

The speculation on the start of the tapering process of QE in the United States continues to sap strength away from other currencies. The Fed meeting in September is one of the possible dates where tapering might be announced. Improving indicators that favor the Fed tapering scenario boost the USD. Viceversa weak data that questions the viability of and end of stimulus will hurt the Dollar.

AUD/USD Technical

The AUD/USD broke through the 0.9141 resistance level during the Asian session only to reverse the gains as the American session got under way. The Aussie was caught between Fed speculation and commodities fueled by geopolitical instability. During the middle of the US trading session there was a reset button hit and now AUD is trending upward.

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