AUD/USD – Aussie Gains On Dismal US GDP

AUD/USD finds itself trading at two-week highs following strong gains on Thursday. The pair is trading just above the 0.93 line in Friday’s European session. On Thursday, the Aussie took advantage of a contraction in US GDP in Q1. In other US releases, Unemployment Claims were sharp but Pending Home Sales fell short of the estimate. On Friday, there are no major events on the schedule. Today’s highlights are Chicago PMI and  Revised UoM Consumer Sentiment. In Australia, Private Sector Credit edged above the forecast and posted a four-month high.

In Australia, Private Sector Credit posted a gain of 0.5%, edging above the estimate of 0.4%. This was particularly good news after a dismal reading from Private Capital Expenditure, which came in at -4.2% in Q1. Analysts pay close attention to indicators measuring activity in the private sector, which is a key component of economic growth. Thus, traders should treat these releases as market-movers, as any unexpected readings can have a significant impact on the movement of AUD/USD.

Key numbers out of the US were mostly a disappointment on Thursday. Preliminary GDP, the primary gauge of economic activity, posted its first decline since Q2 of 2009. The indicator came in at -1.0% for Q1, worse than the estimate of -0.6%. Harsh winter conditions took their toll on the US economy in Q1, and analysts expect a rebound in Q2. After a strong gain in March, Pending Home Sales softened, coming in at 0.4%. This was nowhere near the gain of 1.1%. On a brighter note, Employment Claims dropped to 300 thousand, easily beating the estimate of 321 thousand.

 

AUD/USD for Friday, May 30, 2014

 

AUD/USD May 30 at 10:50 GMT

AUD/USD 0.9307 H: 0.9330 L: 0.9300

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9000 0.9119 0.9229 0.9361 0.9446 0.9617

 

  • AUD has settled down on Friday, trading close to the 0.93 line.
  • 0.9229 has some breathing room following the Aussie’s gains on Thursday. There is followed by support at 0.9119.
  • 0.9361 is the next line of resistance. 0.9446 is a stronger line.

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000, 0.8893 and 0.8757
  • Above: 0.9361, 0.9446 and 0.9617 and 0.9757

 

OANDA’s Open Positions Ratio

AUD/USD ratio is almost unchanged in Friday trading. This is consistent with the lack of movement we’re seeing from the pair. The ratio currently has a slight majority of long positions, indicative of slight trader bias towards the Australian dollar moving upwards.

AUD/USD is trading quietly on Friday. The pair is unchanged in the European session.

 

AUD/USD Fundamentals

  • 1:30 Australian Private Sector Credit. Estimate 0.4%. Actual 0.5%.
  • 12:30 US Core PCE Price Index. Estimate 0.2%.
  • 12:30 US Personal Spending. Estimate 0.2%.
  • 12:30 US Personal Income. Estimate 0.3%.
  • 13:45 US Chicago PMI. Estimate 60.8 points.
  • 13:55 Revised UoM Consumer Sentiment. Estimate 82.9 points.
  • 21:00 US FOMC Member Charles Plosser Speaks.

*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.