AUD/USD – Wobbly Aussie Breaks Below 70 Level

The Australian dollar has posted slight losses on Tuesday, trading at 0.7080 in the North American session. Earlier in the day, AUD/USD briefly slipped below the symbolic 0.70 level. On the release front, Australian NAB Business Confidence dipped to 2 points. Later in the day, we’ll get a look at Australian Consumer Sentiment. In the US, JOLTS Job Openings jumped to 5.61 million, easily beating expectations. On Wednesday, Fed Chair Janet Yellen will testify before the House Financial Services Committee in Washington. With the markets looking for clues regarding the timing of another rate hike, this event will be closely monitored and affect the currency markets.

Australian business confidence slipped in January, according to the NAB Business Confidence Report. The monthly indicator dropped to 2 points, compared to 3 points a month earlier. The quarterly indicator was released last week, and showed strong improvement in Q4, with a reading of 4 points. These releases are consistent with the financial turmoil which has characterized the early weeks of 2016, which has seen global stock markets drop and predictably, business confidence has waned. We’ll get a look at the mood of the Australian consumer later on Tuesday, with the release of  Westpac Consumer Sentiment. The previous release was dismal, with a sharp decline of 3.5%. Another soft reading could send the Aussie even lower.

The US posted a host of soft numbers last week, as last week’s employment and service sector numbers all missed expectations. ISM Non-Manufacturing PMI, dropped to 53.2 points in January, its worst showing since March 2014. Unemployment claims rose unexpectedly to 285 thousand, and the week wrapped up with a dismal Nonfarm Payrolls report, with a small gain of 151 thousand. The markets had expected a much stronger gain of 189 thousand. No less worrying, this figure marked a sharp drop from the previous reading of 292 thousand. The soft labor data continued on Monday, as the Labor Market Conditions Index posted an unimpressive reading of 0.4 points, marking a four-month low. However, there was good news on Tuesday, as JOLTS Job Openings, an important employment indicator, jumped to 5.61 million, compared to 5.41 million. This marked the indicator’s strongest showing in five months.

AUD/USD Fundamentals

Monday (Feb. 8)

  • 19:30 Australian NAB Business Confidence. Actual 2 points

Tuesday (Feb. 9)

  • 6:00 US NFIB Small Business Index. Estimate 94.6 points. Actual 93.9 points
  • 10:00 US JOLTS Job Openings. Estimate 5.41M. Actual 5.61M
  • 10:00 US Wholesale Inventories. Estimate -0.1%. Actual -0.1%
  • 18:30 Australian Westpac Consumer Sentiment
  • 19:00 Australian HIA New Home Sales

Upcoming Key Events

Wednesday (Feb. 10)

  • 10:00 Fed Chair Janet Yellen Testifies

*Key releases are highlighted in bold

*All release times are EST

AUD/USD for Tuesday, February 9, 2016

AUD/USD February 9 at 11:05 EST

AUD/USD  Open: 0.7074 Low: 0.6972  High: 0.7084 Close: 0.7083

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.6848 0.6931 0.7012 0.7100 0.7213 0.7385
  • In the Asian session, the pair posted early losses and then leveled off.  AUD/USD posted losses in European trade but has reversed directions in the North American session and continues to move higher.
  • 0.7100 is a weak resistance line.
  • 0.7012 is providing support, protecting the round number of 0.7000
  • Current range: 0.7012 to 0.7100

Further levels in both directions:

  • Below: 0.7012, 0.6931 and 0.6848
  • Above: 0.7100, 0.7213 and 0.7385

OANDA’s Open Positions Ratio

AUD/USD ratio is showing little movement, consistent with the lack of movement from the pair. Long positions have a slight majority (55%), indicative of trader bias towards the pair gaining ground.

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.