AUD/USD – Aussie Shrugs Off Weak Business Confidence

The Australian dollar has edged lower on Tuesday, as AUD/USD trades in the mid-0.87 line in the European session. The currency started off the week in fine fashion, gaining almost 100 points on Monday. In economic news, Australian NAB Business Confidence dropped to 5 points in September. Later in the day, we’ll get a look at Westpac Consumer Sentiment. In the US, there was just one release, as NFIB Small Business Index missed the estimate.

Australian NAB Business Confidence continues to slip, falling to 5 points in the September release.  This was the key indicator’s weakest showing since March. Weak business confidence could translate into decreased spending and hiring by the private sector, which would be very bad news for the economy and could hurt the Australian dollar.

The US dollar has cooled down after last week’s FOMC minutes were unexpectedly dovish. In the minutes, the Fed poured some cold water on rising expectations of a rate hike, as a number of policymakers said that the Federal Reserve should take a more data-dependent approach regarding a rate hike. The Fed also voiced concern about the rising strength of the US dollar which could weigh on the recovery. On the weekend, FOMC member Stanley Fischer said that the Fed could slow tightening if global growth is weaker than expected.

US Unemployment Claims were unchanged last week, coming in at 287 thousand. This beat the estimate of 291 thousand. The indicator has now exceeded the forecast for four straight readings. Earlier in the week, JOLTS Job Openings climbed to 4.84 million, up from 4.67 million a month earlier. These numbers followed an excellent Nonfarm Payrolls report, as the US labor market continues to improve. With QE slated to end later this month, the focus will shift to the timetable for an interest rake hike.

 

AUD/USD for Tuesday, October 14, 2014

AUD/USD October 14 at 13:50 GMT

AUD/USD 0.8730 H: 0.8812 L: 0.8718

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8456 0.8550 0.8668 0.8763 0.8820 0.8953

 

  • AUD/USD posted gains in the Asian session, breaking above resistance at 0.8763. The pair then retracted, and has remained steady in the European and North American sessions.
  • On the upside, 0.8763 was breached earlier but recovered. It remains a weak line. There is stronger resistance at 0.8220.
  • 0.8668 is providing support.
  • Current range: 0.8668 to 0.8763

Further levels in both directions:

  • Below: 0.8668, 0.8550, 0.8456 and 0.8315
  • Above: 0.8763, 0.8820, 0.8953, 0.9020 and 0.9119

 

OANDA’s Open Positions Ratio

AUD/USD ratio has a majority of long positions, indicative of trader bias towards AUD/USD reversing directions and resuming its rally against the greenback.

 

AUD/USD Fundamentals

  • 00:30 Australian NAB Business Confidence. Actual 5 points.
  • 11:30 US NFIB Small Business Index. Estimate 97.2 points. Actual 95.3 points.
  • 23:30 Australian Westpac Consumer Sentiment.

* 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.