AUD/USD – Flat as Chinese CPI Matches Expectations

AUD/USD is showing little movement in Monday, as the pair trades in the mid-0.86 range. On the release front, Home Loans posted a decline of 0.7%, missing expectations. Chinese CPI held steady at 1.6%. There are no US releases on Monday.

 It was a disappointing start to the week for Australian releases, as Home Loans slipped 0.7%, a second straight decline. This was short of the estimate of -0.3%. Meanwhile, Chinese CPI posted a gain of 1.6%, unchanged from the previous release. The Australian dollar is sensitive to Chinese key events, as the Asian giant is Australia’s number one trading partner. Early on Tuesday, we’ll get a look at NAB Business Confidence, a key event which could impact on the direction of AUD/USD.

On Friday, the RBA released a policy statement, a quarterly event. The RBA said that it would continue its accommodative stance, which has seen interest rates held to 2.50% since August 2013. The RBA, which has constantly criticized the high value of the Aussie as weighing on the economy, drastically changed its tune this time, noting that low rates are supported by the recent weakening of the currency. On Thursday, there was good news on the employment front, as Employment Change bounded back nicely with a gain of 24.1 thousand, good enough to beat the estimate of 20.3 thousand. As expected, the Unemployment Rate edged up from 6.1% to 6.2%.

US Nonfarm Payrolls disappointed on Friday, as the key employment indicator slipped to 214 thousand, well short of the estimate of 235 thousand. On a brighter note, the unemployment rate slipped to 5.8%, its lowest level in six years. On Thursday, Unemployment Claims fell to 278 thousand. This was better than the estimate of 285 thousand and marked a three-week low.

AUD/USD for Monday, November 10, 2014

AUD/USD November 10 at 13:25 GMT

AUD/USD 0.8658 H: 0.8683 L: 0.8641

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8315 0.8456 0.8550 0.8668 0.8763 0.8820

 

  • AUD/USD edged higher in the Asian session. The pair is showing little movement in European trade.
  • On the upside, 0.8668 was tested earlier in the day and remains under pressure. 0.8763 is stronger.
  • 0.8550 is a strong support level.
  • Current range: 0.8550 to 0.8668.

Further levels in both directions:

  • Below: 0.8550, 0.8456, 0.8315 and 0.8240
  • Above: 0.8668, 0.8763, 0.8820, 0.8953 and 0.9020

 

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Monday. This is not consistent with what we’re seeing from the pair, as the Australian dollar has shown very small gains. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD moving higher.

 

AUD/USD Fundamentals

  • 00:30 Australian Home Loans. Estimate -0.3%. Actual -0.7%.

* 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.