AUD/USD – Slightly Lower After Sluggish Australian Retail Sales

The Australian dollar continues to have an uneventful week, as AUD/USD trades in the low-0.92 range on Thursday. In Australia, Retail Sales posted a weak gain, its weakest showing in eight months. Trade Balance posted its third straight surplus after a string of declines. In the US, Trade Balance deficits continue to grow, as the indicator posted its largest deficit since last June. Unemployment Claims climbed to 326 thousand, above the estimate of 319 thousand. We’ll get a look at ISM Non-Manufacturing PMI later in the day.

US Unemployment Claims disappointed, as the key indicator jumped to 326 thousand last week, up from 311 thousand in the previous release. This missed the estimate of 319 thousand. Earlier in the week, ADP Nonfarm Payrolls jumped to 191 thousand, up from 139 thousand a month earlier. This practically matched the estimate of 192 thousand. We’ll get a look at the Unemployment Rate and NFP on Friday.

In Australia, Retail Sales posted a weak gain of 0.2%, short of the estimate of 0.4%. It was the indicator’s weakest performance since August. Retail Sales is the primary gauge of consumer spending, which plays a key role in economic growth. Meanwhile, the RBA maintained the benchmark interest rate at 2.50%, where it has been pegged since last August. RBA Governor Glenn Stevens took a swipe at the Aussie, saying that the high value of the currency in the past few months was not good for economic growth. After the rate decision, the Australian dollar briefly pushed above the 0.93 line, its highest level in four months. Last week, Stevens said that interest rates are unlikely to rise in 2014, as the RBA tries to boost consumer spending and residential construction.

Earlier in the week, Fed chair Janet Yellen said that inflation and employment levels needed to improve considerably, and the Federal Reserve would continue to provide monetary stimulus for some time. Currently, the Fed is purchasing $55 billion in assets under its QE scheme. There have been three tapers to QE so far, and Yellen plans to wind up the program in the fall, provided that the US economy does not run into any serious turbulence. At the same time, the Federal Reserve has stated that it has no plans to raise interest rates until sometime in 2015.

AUD/USD for Thursday, April 3, 2014

AUD/USD April 3 at 13:30 GMT

AUD/USD 0.9238 H: 0.9250 L: 0.9206

AUD/USD Technical

• AUD/USD has edged lower on Thursday. The pair dipped close to the 0.92 level, touching a low of 0.9206.
• There is weak support at 0.9229. This line could be tested if the Australian dollar loses more ground. There is stronger 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 unchanged in Thursday trading. This is consistent with what we are seeing from the pair, which is showing little activity. AUD/USD ratio is almost evenly split between long and short positions, indicative of a lack of trader bias towards what direction AUD/USD will take.

The Australian dollar is trading in the low-0.92 range. The pair is steady early in the North American session.

AUD/USD Fundamentals

• 00:30 Australian Retail Sales. Estimate 0.2%. Actual 04%.
• 00:30 Australian Trade Balance. Estimate 0.82B. Actual 1.20B.
• 11:30 US Challenger Job Cuts. Actual -30.2%.
• 12:30 US Trade Balance. Estimate -38.3B. Actual -42.3B.
• 12:30 US Unemployment Claims. Estimate 319K. Actual 326K.
• 13:45 US Final Services PMI. Estimate 55.5 points. Actual 55.3 points.
• 14:00 US ISM Non-Manufacturing PMI. Estimate 53.5 points.
• 14:30 US Natural Gas Storage. Estimate -74B.

*Key releases are highlighted in bold

*All release times are GMT

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