AUD/USD – Struggling Aussie Dips Below 93

AUD/USD continues to lose ground on Thursday, as the pair trades below the 0.93 level early in the North American session. The pair has surrendered over 100 points this week and is trading at its lowest level since early June. On the release front, Australian Building Approvals was down sharply and US Unemployment Claims met expectations.

Australian Building Approvals tends to show strong fluctuations, making accurate forecasts a tricky task. After a strong gain in May, the key indicator reversed directions in June, posting a decline of 5.5%. This was much lower than the estimate of a 1.0% decline. It was also the indicator’s fourth drop in five months, pointing to trouble in the construction sector. Australian Import Prices also slipped, posting a decline of 3.0%. This was the sharpest drop since December 2010.

In the US, Advance GDP soared in Q2, posting a gain of 4.0%. This easily beat the estimate of 3.1%. The boost in economic activity was boosted by strong consumer confidence and business activity in Q2. Meanwhile, ADP Nonfarm Payrolls was unable to keep pace. The key employment indicator dropped to 218 thousand, compared to 284 thousand a month earlier. This was well off the estimate of 234 thousand. If the official Nonfarm Payrolls follows suit with a weak reading, the US dollar could give up its recent gains.

If CB Consumer Confidence is any indication, the US consumer is brimming with optimism about the economy. The key indicator jumped to 90.9 points, crushing the estimate of 85.5 points. This was the indicator’s highest level since September 2007. Consumer confidence is closely tracked by analysts since a confident consumer is likely to increase consumption, which is critical for economic growth.

 

AUD/USD for Thursday, July 31, 2014

AUD/USD July 31 at 13:45 GMT

AUD/USD 0.9300 H: 0.9330 L: 0.9280

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9020 0.9119 0.9229 0.9361 0.9446 0.9617

 

  • AUD/USD was flat in the Asian session. The pair edged lower in the European session, dropping below the 0.94 line. AUD/USD is steady in the North American session.
  • 0.9229 continues to provide support.
  • 0.9361 is the next resistance line.
  • Current range: 0.9229 to 0.9361

Further levels in both directions:

  • Below: 0.9229, 0.9119 and 0.9020
  • Above: 0.9361, 0.9446, 0.9617 and 0.9757

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Thursday, reversing the direction seen a  day earlier. This is not consistent with the movement of the pair, as the Australian dollar continues to post losses. The ratio has a slight majority of long positions, indicative of trader bias as to the Australian dollar moving higher.

 

AUD/USD Fundamentals

  • 1:30 Australian Building Approvals. Estimate -1.0%. Actual -5.0%.
  • 1:30 Australian Import Prices. Estimate -1.4%. Actual -3.0%.
  • 1:30 Australian Private Sector Credit. Estimate 0.4%. Actual 0.7%.
  • 11:30 US Challenger Job Cuts. Actual 24.4%.
  • 12:30 US Unemployment Claims. Estimate 303K. Actual 302K.
  • 12:30 US Employment Cost Index. Estimate 0.5%. Actual 0.7%.
  • 13:45 US Chicago PMI. Estimate 63.2 points. Actual 52.6 points.
  • 14:30 US Natural Gas Storage. Estimate 92B.

* 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.