AUD/USD – Struggling Aussie Kicks Off Week Below 0.90

AUD/USD is steady in Monday trading. After losing over one cent on Thursday, the pair finds itself trading in the low-0.89 range. This marks the first time that the pair has started the trading week below the key 0.90 level since early September. In economic news, today’s highlights out of the US include the Empire State Manufacturing Index and Industrial Production. The lone Australian release, CB Leading Index, will be released later on Monday. 

Australian releases have struggled lately, but employment numbers looked sharp on Thursday. Employment Change surprised the markets with a strong gain of 21.0 thousand, a seven-month high. This easily beat the estimate of 10.3 thousand. The unemployment rate edged higher to 5.8%, matching the forecast. However, the strong data was of little help to the Aussie, which dropped below the 0.90 line.

There was some good news on the fiscal front, as the US House of Representatives easily passed a budget deal on Thursday. The agreement, which will be voted on by the Senate this week, will remove the risk of a government shutdown and reduces the deficit by a modest $23 billion. Democrats and Republicans both had criticism of the proposal, but there is general agreement in Washington that the compromise reached is a positive step which removes some of the fiscal uncertainty we’ve seen in recent months.

US employment numbers have generally been solid recently, although last week’s disappointed, posting a nine-week high.  The Fed has said that a stronger employment picture is a prerequisite to tapering, and there is speculation that the Fed could make a move this week, although there’s a greater likelihood that we won’t see a taper until early next year. Still, the Fed policy meeting is the event of the week and will be closely monitored by the markets. Currently, the Fed is purchasing $85 billion in assets every month, and a Fed taper would likely boost the US dollar against the major currencies.

 

AUD/USD for Monday, December 16, 2013

Forex Rate Graph 21/1/13

AUD/USD December 16 at 13:50 GMT

AUD/USD 0.8947 H: 0.8961 L: 0.8918

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8658 0.8735 0.8893 0.9000 0.9119 0.9229

 

  • AUD/USD is steady in Monday trading. The pair touched a low of 0.8923 in the Asian session.
  • The key level of 0.9000 has reverted to a resistance role. This is not a strong line and could face strong pressure if the Australian dollar reverses direction.
  • On the downside, 0.8893 is providing support. This is followed by support at 0.8735, which has remained intact since July 2010.
  • Current range: 0.8893 to 0.9000

 

Further levels in both directions:

  • Below: 0.8893, 0.8735, 0.8658 and 0.8505
  • Above: 0.9000, 0.9119, 0.9229, 0.9305 and 0.9400

 

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged in Monday trading. This is reflected in the current movement of the pair, as the pair is not showing much movement. The ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar moving higher.

The Australian dollar is trading in the low-0.89 range on Monday. With no major releases out of the US, it could be a quiet North American session for AUD/USD.

 

AUD/USD Fundamentals

  • 13:30 US Empire State Manufacturing Index. Estimate 4.9 points.
  • 13:30 US Revised Nonfarm Productivity. Estimate 2.9%.
  • 13:30 US Revised Unit Labor Costs. Estimate -1.5%.
  • 14:00 US Flash Manufacturing PMI. Estimate 54.9 points.
  • 14:00 US TIC Long-Term Purchases. Estimate 31.4B.
  • 14:15 US Capacity Utilization Rate. Estimate 78.5%.
  • 14:15 US Industrial Production. Estimate 0.6%.

 

*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.