AUD/USD – Aussie Shows Gains Despite Strong US GDP

AUD/USD has posted gains on Thursday, as the pair trades in the low-0.88 range. On the release front, Australian Import Prices posted a second straight decline, coming in at -0.8%. In the US, GDP posted a strong gain of 3.5% in Q3, while Unemployment Claims showed little change, coming in at 287 thousand.

It was another solid performance from US GDP, which posted a strong gain of 3.5% in Q3, ahead of the estimate of 3.1%. Although this was short of the Q2 reading of 4.0%, the two readings mark the strongest six-month gain we’ve seen in ten years. Unemployment Claims increased slightly to 287 thousand, slightly higher than the previous reading of 284 thousand. However, the four-week average remains at multi-year lows, pointing to an improving labor market.

The US dollar posted strong gains on Wednesday, boosted by a hawkish Federal Reserve policy statement. The Fed said that the labor market is strengthening and inflation remains on target, although it did note that the labor market participation rate remains low. As expected the Fed completed the taper of its QE3 program. The asset-purchase program was initially started in 2008, at the height of the economic crisis, in order to boost a weak US economy. The termination of the QE is a symbolic step which is a vote of confidence from the powerful Fed that the US economy is on the right track

In the US, durable goods looked dismal in September. Core Durable Goods Orders dropped 0.2%, its second decline in three months. This was well short of the estimate of 0.5%. Durable Goods Orders followed suit with a decline of -1.3%. This was the indicator’s second straight decline and missed the estimate of 0.4%. There was much better news from CB Consumer Confidence, as the indicator climbed to 94.5 points, up sharply from 86.0 points. The easily beat the estimate of 87.4 and marked a 7-year high.

 

AUD/USD for Thursday, October 30, 2014

AUD/USD October 30 at 14:40 GMT

AUD/USD 0.8821 H: 0.8824 L: 0.8756

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8668 0.8763 0.8820 0.8953 0.9020 0.9119

 

  • AUD/USD stabilized in the Asian session, following sharp losses on Wednesday. The Aussie has posted gains in the European and North American sessions.
  • 0.8820 is under strong pressure and we could see this line fall during the North American session. 0.8763 is stronger.
  • 0.8953 has strengthened in resistance as the pair trades at lower levels.
  • Current range: 0.8820 to 0.8953.

Further levels in both directions:

  • Below: 0.8220, 0.8763, 0.8668, 0.8550 and 0.8456
  • Above: 0.8953, 0.9020, 0.9119 and 0.9217

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Thursday. This is consistent with what we’re seeing from the pair, as the Australian dollar has posted gains. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD continuing to move to higher ground.

 

AUD/USD Fundamentals

  •  00:30 Australian Import Prices. Estimate +0.3%. Actual -0.8%.
  • 12:30 US Advance GDP. Estimate 3.1%. Actual 3.5%.
  • 12:30 US Unemployment Claims. Estimate 284K. Actual 287K.
  • 14:30 US Advance GDP Price Index. Estimate 2.0%.
  • 13:00 US Federal Reserve Chair Janet Yellen Speaks.
  • 14:30 US Natural Gas Storage. Estimate 83B.

* 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.