AUD/USD – Listless as RBA Says Slow Growth Ahead

AUD/USD is showing limited movement on Friday, as the pair trades in the mid-0.77 range. It’s a quiet day on the release front. In the US, today’s highlight is Preliminary UoM Consumer Sentiment. The markets are expecting a strong reading, with an estimate of 98.2 points. There are no Australian releases on Friday.

On Thursday, Governor Glenn Stevens said that economic growth remains lower than the RBA would like and that lowering interest rates may not be enough to spur growth. The RBA shocked the markets with a rate cut of 0.25% last week, lowering rates to 2.25%. Monetary divergence with the US will likely keep the Australian dollar at low levels, as the US Federal Reserve, which will likely raise rates later in the year, is headed in the opposite direction.

Underscoring the RBA’s concerns about the economy, Australian employment data softened in January. Employment Change dropped by 12.2 thousand, well off the estimate of -4.7 thousand. This marked the first decline since September. The employment rate was unexpectedly higher, climbing to 6.4%, up from 6.1% a month earlier. The estimate stood at 6.2%.

In the US, retail sales pointed to sharp declines. Core Retail Sales declined by 0.9%, while Retail Sales dropped by 0.8%. Both were well off their estimates of -0.4%. There was no relief from unemployment claims, which jumped to 304 thousand, compared to 284 thousand in the previous reading. The markets had expected a stronger reading of 282 thousand.

AUD/USD for Friday, February 13, 2015

AUD/USD February 13 at 10:45 GMT

AUD/USD 0.7731 H: 0.7792 L: 0.7728

AUD/USD Technical

• AUD/USD posted gains in the Asian session, putting pressure on resistance at 0.7799. However, the pair has retracted in European trade.
• 0.7799 is a weak resistance line. 0.7904 is stronger.
• 0.7684 is an immediate support level.
• Current range: 0.7684 to 0.7799

Further levels in both directions:

• Below: 0.7684, 0.7582, 0.7403 and 0.7265
• Above: 0.7799, 0.7904, 0.8081, 0.8150 and 0.8214

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Friday. This is consistent with the pair’s movement, as the Aussie has posted small losses. The ratio has a majority of long positions, indicative of trader bias towards the Australian dollar moving higher.

AUD/USD Fundamentals

• 13:30 US Import Prices. Estimate -3.1%.
• 14:30 US CB Leading Index.
• 15:00 US Preliminary UoM Consumer Sentiment. Estimate 98.2 points.
• 15:00 US Preliminary UoM Consumer Inflation Expectations.

*Key releases are highlighted in bold

*All release times are GMT

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