AUD/USD – Little Movement in Holiday Trade

The Australian dollar is showing limited movement on Monday, as AUD/USD trades at 0.6980 in the European session. On the release front, the week kicked off on a sour note as Australian NAB Business Confidence slipped to 3 points. On Monday, the Australian markets are closed for Australia day. There are no US releases on the schedule, so it’s unlikely that the Australian dollar will show much movement during the day. On Tuesday, we’ll get a look at a pair of key releases, as the US releases CB Consumer Confidence and Australia publishes CPI.

AUD/USD posted strong gains last week, climbing 140 points and closing at the symbolic 70 line. The Aussie took advantage of weak US inflation and employment numbers. The US Consumer Price Index, the primary gauge of consumer inflation, declined 0.1%, short of the estimate of 0.0%. Core CPI also softened, posting a gain of 0.1%. This was short of the forecast of 0.2%. Meanwhile, US jobless claims jumped to their highest level in 11 months, as the reading of 293 thousand was much worse than the estimate of 279 thousand.

US inflation numbers remain low, which has proven to be a sore spot in a generally strong US economy. This was underscored last week, as key inflation numbers missed their estimates. CPI dropped 0.1%, short of the estimate of 0.0%. Core CPI also softened, posting a gain of 0.1%. This was short of the forecast of 0.2%. Weak inflation indicators remain a concern for Federal Reserve policymakers, who must decide whether another interest rate hike would be appropriate in early 2016. Meanwhile, US jobless claims jumped to their highest level in 11 months, as the reading of 293 thousand was much worse than the estimate of 279 thousand. Will these weak numbers dampen Fed enthusiasm for a rate hike? There is speculation that the Fed could make a move in March, contingent on the strength of the US economy. A lack of inflation points to slack in the economy, and the Fed could hold off on another hike until inflation levels improve.

AUD/USD Fundamentals

Monday (Jan. 25)

  • There are no Australian or US releases on Monday

Upcoming Key Events (Jan. 26)

  • 10:00 US CB Consumer Confidence. Estimate 96.6 points

*Key events are in bold

*All release times are EST

AUD/USD for Monday, January 25, 2016

AUD/USD January 25 at 7:05 EST

AUD/USD Open: 0.6999  Low: 0.6956  High: 0.7031  Close: 0.6980

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.6754 0.6848 0.6931 0.7063 0.7100 0.7213
  • The pair posted gains in the Asian session but retracted in European trade
  • 0.6931 is a weak support line
  • There is resistance at 0.7063
  • Current range: 0.6931 to 0.7063

Further levels in both directions:

  • Below: 0.6931, 0.6848, 0.6754 and 0.6625
  • Above: 0.7063, 0.7100 and 0.7213

OANDA’s Open Positions Ratio

AUD/USD ratio is showing little movement, reflective of a lack of movement from the pair. The ratio is close to an even split between long and short positions, indicative of a lack of trader bias as to which direction the pair will take next.

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.