AUD/USD – Aussie Stable as Retail Sales Improves

AUD/USD remains calm as we start the new trading week. On Monday, the pair is trading in the low-0.93 range. On the release front, Australian Retail Sales rebounded last month and posted a 0.6% gain. However, ANZ Job Advertisements softened last month, coming in at 0.3%. In the US, today’s sole release is the Loan Officer Survey.

Australian releases kicked off the week with mixed results. Retail Sales, the primary gauge of consumer spending, posted a gain of 0.6% in June, a five-month high. This easily beat the estimate of 0.3%. On the employment front, ANZ Job Advertisements posted a small gain of 0.3%, down from 4.5% a month earlier. We’ll get another look at employment data on Friday, with the release of Employment Change. If the key indicator does not meet expectations, the Aussie could lose ground.

US employment numbers failed to impress last week. On Friday, Nonfarm Payrolls took a tumble, slipping to 209 thousand, compared to 288 thousand a month earlier. This was well below the estimate of 231 thousand and marked a four-month low. Earlier in the week, Unemployment Claims rose to 302 thousand, very close to the estimate of 303 thousand. There was positive news from the manufacturing sector, as US ISM Manufacturing PMI rose to 57.1 points, its best showing since November. As well, UoM Consumer Sentiment continues to look strong, coming in at 81.8 points. The index has not been below the 80-point level in 2014, pointing to strong consumer confidence.

Last week, the Federal Reserve released a policy statement, with the Fed sounding somewhat dovish in tone. Policymakers acknowledged lower unemployment levels, but noted that “there remains significant underutilization of labor resources” in the economy. The Fed statement reinforces the view that the US central bank is in no rush to raise interest rates after the termination of QE, which is expected in October. As well, the Fed said that inflation levels have moved somewhat closer to the Fed’s target of 2.0%. The Fed has remained vague as to when it will raise interest rates, but if the economy continues moving in the right direction, a rate increase is likely before mid-2105.

 

AUD/USD for Monday, August 4, 2014

AUD/USD August 4 at 13:35 GMT

AUD/USD 0.9325 H: 0.9330 L: 0.9309

 

AUD/USD Technical

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

 

  • AUD/USD has been uneventful throughout the day. The pair touched a low of 0.9306 early in the Asian session but has since edged higher.
  • 0.9229 is providing strong support.
  • 0.9361 is an immediate resistance line. 0.9446 is stronger.
  • 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 Monday, continuing in the direction seen late last week. This is consistent with the movement of the pair, as the Australian dollar has made small gains. The ratio has a majority of long positions, indicative of trader bias towards the Australian dollar moving higher.

 

AUD/USD Fundamentals

  • 00:30 Australian MI Inflation Gauge. Actual 0.2%.
  • 1:30 Australian Retail Sales. Estimate 0.3%. Actual 0.6%.
  • 1:30 Australian ANZ Job Advertisements. Actual 0.3%.
  • Tentative – US Loan Officer Survey.

* 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.