AUD/USD – Firm Ahead of Unemployment Claims

The Australian dollar is steady in Friday trading, as AUD/USD trades in the low-0.91 range. The Aussie rallied on Thursday following strong Australian numbers. Taking a look at Friday news, there are three key events out of the US on the schedule – Nonfarm Payrolls, the Unemployment Rate and Trade Balance. There are no Australian releases on Friday.

In the US, all eyes are on Nonfarm Payrolls, which will be released together with the Unemployment Rate later on Friday. US employment numbers have been a mix so far this week, as ADP Nonfarm Payrolls was well below the estimate, but Unemployment Claims dropped to its lowest level since December. Even if today’s numbers aren’t great, we can expect the Fed to take the scissors and trim QE at its meeting next week.  New York Fed President William Dudley said as much on Thursday when he stated that the threshold to alter the Fed’s program to wind up QE was “pretty high”. In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue.

It’s been an excellent week for Australian releases. Retail Sales looked sharp in February, with a strong gain of 1.2%. This easily beat the estimate of 0.5%, and was the indicator’s strongest gain since last March. Retail Sales is the primary gauge of consumer spending, so a strong reading from the indicator points is an important sign of economic growth. Trade Balance also looked sharp, posting a surplus of $1.43 billion, crushing the estimate of $0.13 billion. The indicator has been marked by monthly deficits, so a sharp increase in the trade surplus is certainly good news for the economy and the Australian dollar. As well, GDP rose in Q4 and Building Permits also impressed.

Earlier this week, the RBA opted to keep a steady course and maintain interest rates at 2.50%, where they have been pegged since August. The Bank said that current low rates were likely to remain low for some time and also took a shot at the high value of the Australian dollar. Governor Glenn Stevens stated that the currency remains “high by historical standards.” The RBA has said in the past that it would like to see the Aussie closer to the 85 level, so we’re likely to see the central bank continue to “talk down” the currency.

 

AUD/USD for Friday, March 7, 2014

Forex Rate Graph 21/1/13

AUD/USD March 7 at 14:40 GMT

AUD/USD 0.9128 H: 0.9130 L: 0.9069

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8893 0.9000 0.9119 0.9229 0.9361 0.9466

 

  • AUD/USD has posted slight gains in Friday trading. The pair has moved back above the 0.91 line in the European session.
  • On the upside, 0.9229 is providing strong resistance.
  • 0.9119 has switched to a support role as the Aussie moves higher. The next support line is the key 0.90 level.
  • Current range: 0.9119 to 0.9229

Further levels in both directions:

  • Below: 0.9119, 0.9000, 0.8893, 0.8735 and 0.8658
  • Above: 0.9229, 0.9361, 0.9466 and 0.9595

 

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged in Friday trading. This is not consistent with what we are seeing from the pair, as the Aussie has posted slight gains. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias towards the Australian dollar continuing to move higher against the US currency.

The Australian dollar is trading above the 0.91 line and continues to put pressure on the greenback in the European session.

 

AUD/USD Fundamentals

  • 13:30 US Nonfarm Employment Change. Estimate 151K.
  • 13:30 US Trade Balance. Estimate -39.1B.
  • 13:30 US Unemployment Rate. Estimate 6.6%.
  • 13:30 US Average Hourly Earnings. Estimate 0.2%.
  • 17:00 US FOMC Member William Dudley Speaks.
  • 18:00 US Consumer Credit. Estimate 14.6B.

 

*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.