AUD/USD – Aussie Under Pressure, US Retail Sales Sink

AUD/USD is under pressure on Wednesday, as the pair fell below the 0.81 line before recovering. In the North American session, the pair is trading in the mid-0.81 range. On the release front, US retail numbers slumped badly, as Core Retail Sales fell by 1.0%, while Retail Sales dropped 0.9%. There are no Australian releases on Wednesday. However, Employment Change will be released early on Thursday, and a reading that is not within expectations could have a strong impact on AUD/USD. The markets are expecting a modest gain of 5.3 thousand.

US retail sales caught the markets off guard with sharp declines in December. Core Retail Sales came in at -1.0%, while Retail Sales followed suit with a loss of 0.9%. Both key indicators recorded their worst showings since May 2010. Part of the sharp drop can be attributed to lower receipts at gasoline stations, as gas prices have fallen sharply in recent weeks.

The news was rosier on the employment front on Tuesday, as JOLTS Jobs Openings climbed to 4.97 million, easily beating the forecast of 4.86 million. This is the indicator’s highest level since January 2001. The strong employment numbers are a welcome result of the robust economy, as the deepening recovery fuels demand for more workers. The health of the labor market is an important component of any decision to raise interest rates, so upcoming employment releases will be under the market microscope as the Fed mulls when to raise interest rates.

AUD/USD for Wednesday, January 14, 2015

AUD/USD January 14 at 15:20 GMT

AUD/USD 0.8147 H: 0.8188 L: 0.8068

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7799 0.7904 0.8081 0.8150 0.8214 0.8315

 

  • AUD/USD posted sharp losses in the Asian session, testing support at 0.8068. The pair reversed directions in the European session, recovering most of the earlier losses. AUD/USD is unchanged in the North American session.
  • 0.8150 has switched to a resistance role and could see more action during the North American session. 0.8214 is stronger.
  • 0.8081 is an immediate support line.
  • Current range: 0.8081 to 0.8150.

Further levels in both directions:

  • Below: 0.8081, 0.7904, 0.7799 and 0.7695
  • Above: 0.8150, 0.8214, 0.8315, 0.8456 and 0.8547

 

OANDA’s Open Positions Ratio

AUD/USD ratio is almost unchanged on Wednesday, continuing the lack of movement seen during the week. This is consistent with the lack of movement displayed by the pair. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD moving higher.

AUD/USD Fundamentals

  • 13:30 US Core Retail Sales. Estimate +0.1%. Actual -1.0%.
  • 13:30 US Retail Sales. Estimate +0.2%. Actual -0.9%.
  • 13:30 US Import Prices. Estimate -2.7%. Actual -2.5%.
  • 15:00 US Business Inventories. Estimate 0.2%.
  • 15:30 US Crude Oil Inventories. Estimate 1.2M.
  • 18:01 US 30-year Bond Auction.
  • 19:00 US Beige Book.

*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.