AUD/USD – Aussie Firm Ahead of Nonfarm Payrolls

AUD/USD has edged higher on Friday, as the pair trades in the 0.93-range in the European session. The Australian dollar has enjoyed a good week, gaining about 100 points against its US counterpart. In the US, the markets await the key event of the week, Nonfarm Payrolls. As well, the Unemployment Rate will be released. There are no Australian releases on Friday.

In the US, Friday’s spotlight is on employment releases. On Wednesday, ADP Nonfarm Payrolls slipped to 179 thousand, well off the estimate of 217 thousand. Unemployment Claims were not sharp, rising to 312 thousand, up from 300 thousand in the previous reading. The estimate stood at 309 thousand. Nonfarm Payrolls will be released on later on Friday, and a weak reading could weigh on the US dollar. We’ll also get a look at the Unemployment Rate, with little change expected.

US manufacturing and services sectors are pointed in the right direction, according the ISM Business Survey Committee. The ISM Manufacturing and Non-Manufacturing PMIs both improved in May. There was some confusion earlier in the week, as the Manufacturing PMI was based on faulty data, with the original report stating that the manufacturing index had softened in May. This was later corrected, as the index actually improved to 55.4 points in May, up from 54.9 points a month earlier. Meanwhile, the Non-Manufacturing PMI hit a nine-month high last month, climbing to 56.3 points, ahead of the estimate of 55.6 points.

Australian GDP looked sharp in Q2, posting an excellent gain of 1.1%. This beat the estimate of 0.9%. The GDP reading points to strong growth in the economy, but surprisingly, other key releases failed to keep pace this week. Building Permits, Retail Sales and Trade Balance all missed their estimates in May. Meanwhile, there were no surprises from the RBA earlier this week, as it maintained the benchmark interest rate at 2.50%, where it has been pegged since last July. The RBA noted that present monetary policy would “foster sustainable growth in demand and inflation”, and the Aussie reacted with slight gains.

 

AUD/USD for Friday, June 6, 2014

AUD/USD June 6 at 11:20 GMT

AUD/USD 0.9346 H: 0.9357 L: 0.9325

 

AUD/USD Technical

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

 

  • AUD has edged higher on Friday.
  • 0.9229 is a strong support line.
  • 0.9361 is a weak line of resistance. There is stronger resistance at 0.9446.

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

AUD/USD ratio continues to point to gains in short positions. This is not consistent with the movement of the pairs, as the Australian dollar has edged higher. The pair has a slim majority of long positions, indicative of slight trader bias towards the Australian dollar continuing to move upwards.

AUD/USD has posted slight gains on Friday. The pair is unchanged in the European session.

 

AUD/USD Fundamentals

  • 12:30 US Nonfarm Employment Change. Estimate 214K.
  • 12:30 US Unemployment Rate. Estimate 6.4%.
  • 12:30 US Average Hourly Earnings. Estimate 0.2%.
  • 19:00 US Consumer Credit. Estimate 15.3B.

*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.