AUD/USD – Aussie Higher After Strong Chinese Manufacturing Data

The Australian dollar has posted strong gains on Monday, as AUD/USD trades at 0.7244 in the North American session. The Aussie received a boost as Chinese Industrial Production posted a strong gain of 6.2%. In economic news, the RBA will release the minutes of its last policy meeting. The RBA held rates steady at 2.00%, but any hints about further monetary easing due to a slack in the economy could send AUD/USD lower. As well, we’ll get a look at HPI and New Motor Vehicle Sales. In the US, there are no releases on Monday. The markets are keeping a close look at US CPI, which will be released on Tuesday.

China is Australia’s largest trading partner, making the Australian dollar sensitive to key Chinese releases. Last week’s strong Chinese Industrial report helped bolster the Aussie, as the indicator jumped 6.2%, well above the forecast of 5.7% and a five-month high. Australian employment numbers also impressed last week, but the Australian dollar shrugged off the strong numbers. Employment Change surged to by an astounding 71.4 thousand, raising doubts about the accuracy of the data. The unemployment rate edged lower to 5.8%, better than the forecast of 6.0%.

The US labor market has been very strong, so weak employment readings last week came as a rude surprise. Unemployment Claims shot up to 282 thousand, its highest level in two months. The markets had expected a reading of 266 thousand. Still, the four-week average of unemployment claims remains at low levels. This was followed by JOLT Job Openings, which slipped to 5.38 million, sharply lower than the previous month’s reading of 5.53 million. This soft figure was way off the estimate of 5.59 million. Will these weak numbers deter the Federal Reserve from  proceeding with an expected rate hike at the policy meeting on December 16? There are no guarantees as to what the Fed has in mind for the markets, but the likelihood remains very high that a rate hike will occur, to the point that we’re likely to see strong volatility in the markets if the Fed doesn’t press the rate trigger this week.

AUD/USD Fundamentals

Monday (Dec. 14)

• 23:30 Australian Monetary Policy Meeting Minutes
• 23:30 Australian HPI. Estimate 2.1%
• 23:30 Australian New Motor Vehicle Sales

Upcoming Key Events

Tuesday (Dec. 15)

• 12:30 US CPI. Estimate 0.0%
• 12:30 US Core CPI. Estimate 0.2%

*Key releases are highlighted in bold

*All release times are GMT

AUD/USD for Tuesday, December 14, 2015

AUD/USD December 14 at 19:35 GMT

AUD/USD 0.7245 H: 0.7270 L: 0.7161

AUD/USD Technical

• AUD/USD dipped in the Asian session but recovered. The pair has posted gains in the European and North American session.
• 0.7213 was tested earlier in support and remains under pressure.
• 0.7349 is an immediate resistance line.
• Current range: 0.7213 to 0.7349

Further levels in both directions:

• Below: 0.7213, 0.7100 and 0.7063
• Above: 0.7349, 0.7440, 0.7526 and 0.7644

OANDA’s Open Positions Ratio

AUD/USD ratio is close to a split between long and short positions, indicative of a lack of trader bias as to what direction the pair takes.

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.