AUD/USD – Slight Losses Following Strong US Employment, GDP Data

AUD/USD has lost ground, as the pair trades in the mid-92 range on Friday. The US dollar has reversed its recent downward trend, following another solid Unemployment Claims release, as well as a Final GDP which met expectations. In the US, Revised UoM Consumer Sentiment weakened in February and missed expectations. There are no Australian releases on Friday.

US Unemployment Claims continues to impress. The key indicator dropped to 311 thousand, its lowest level in over three months. The estimate was 326 thousand, marking the fourth straight week that the reading has come in below the forecast. The news was not as good from Pending Home Sales, with a reading of -0.8%. This disappointed the markets, which had expected a small gain of 0.1%. Earlier in the week, New Home Sales also lost ground in February, and concern is bound to increase about the health of the US housing industry. Final GDP posted a gain of 2.6% in Q4, just shy of the estimate of 2.7%. This was lower than the Q3 gain, but is indicative of a growing economy.

RBA Governor Glenn Stevens gave an upbeat message on Wednesday and the Australian dollar responded with gains. Stevens said that the economy has improved thanks to the lower exchange rate since last April and improved global economic conditions. Stevens reiterated that low interest rates are unlikely to rise in 2014, as the RBA tries to boost consumer spending and residential construction.

Ukraine’s economy is in shambles as a result of the four-month political crisis which led to the ouster of the government and the Russian annexation of the Crimean region. Prime Minister Arseniy Yatsenyuk acknowledged that the country is on the edge of bankruptcy, and GDP could drop by as much as 3% this year. However, help is on the way. The IMF is set to sign a two-year loan of up to $18 billion, and the EU has offered a package of EUR 11 billion. Ukraine has already received two bailouts from the IMF since 2008, and will have to implement budget cuts and other measures in order to receive the new package from the IMF.

 

AUD/USD for Friday, March 28, 2014

Forex Rate Graph 21/1/13

AUD/USD March 28 at 14:15 GMT

AUD/USD 0.9243 H: 0.9295 L: 0.9238

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9000 0.9119 0.9229 0.9361 0.9446 0.9542

 

  • AUD/USD has edged lower on Friday. The pair touched a high of 0.9295 in the Asian session but has since retracted.
  • 0.9229 continues in a support role. This is a weak line which could see pressure during the day. Next, there is support at 0.9119.
  • 0.9361 is a strong resistance line.
  • Current range: 0.9229 to 0.9361

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000, 0.8893 and 0.8735
  • Above: 0.9361, 0.9466, 0.9542 and 0.9617

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Friday, continuing the trend we saw a day earlier. This is consistent with what we are seeing from the pair, as the Aussie has posted modest losses. AUD/USD ratio is made up of a majority of long positions, reflecting a trader bias towards the Australian dollar continuing its rally against the US currency.

The Australian dollar is trading in the mid-0.92 range and is under pressure early in the North American session.

 

AUD/USD Fundamentals

  • 00:20 US FOMC Member Daniel Tarullo Speaks.
  • 12:30 US Core PCE Price Index. Estimate 0.1%. Actual 0.1%.
  • 12:30 US Personal Spending. Estimate 0.3%. Actual 0.3%.
  • 12:30 US Personal Income. Estimate 0.4%. Actual 0.3%.
  • 13:55 US Revised UoM Consumer Sentiment. Estimate 80.6 points. Actual 80.0 points.
  • 13:55 US Revised 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.

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.