AUD/USD – Aussie Steady, US Jobless Claims Next

The Australian dollar has posted slight gains on Thursday, as AUD/USD continues its impressive rally. The pair has jumped close to 200 points this week, with the 0.77 line in striking distance. AUD/USD is trading at 0.7670 in the European session. In economic news, Australia HIA New Home Sales posted a sharp decline of 5.3%. Private Sector Credit rose 0.6%, within expectations. In the US, today’s highlight is Unemployment Claims.

The Aussie continues to climb, as the markets digest Janet Yellen’s speech in New York on Tuesday. Prior to the speech, several Fed officials had called for a raise in interest rates as early as April, but the Fed chair poured cold water on any rate hike enthusiasm with an ultra-dovish speech. Yellen gave notice that the Fed would maintain its cautious approach towards monetary tightening, given the risks to the US economy from turbulent global conditions and weakness in China. Yellen downplayed higher inflation levels, which in January reached 1.7 percent, the highest in almost two years. This reading is not far from the Fed’s target of 2.0 percent and some Fed members have gone on record saying that the Fed should raise rates before inflation pushes above the 2.0 percent threshold. Will Yellen’s cautious assessment be reinforced or challenged by her Fed colleagues? New York Fed president William Dudley will address a meeting in Lexington, Virginia on Thursday, and the markets will be looking for Dudley’s take on Yellen’s comments.

The Australian dollar is sensitive to key Chinese releases, as the Asian giant is Australia’s largest trading partner and most important export market. Traders should keep a close eye on Chinese manufacturing PMIs which will be released early Friday. With both indicators expected to show contraction, the Aussie could lose ground against the US dollar if these indicators don’t beat expectations. The Chinese slowdown in early 2016 has caused turmoil in the global markets, but the Aussie has sparkled in the month of March, gaining over 500 points against the US dollar.

AUD/USD Fundamentals

Wednesday (March 30)

  • 20:00 Australian HIA New Home Sales. Actual -5.3%
  • 20:30 Australian Private Sector Credit. Estimate 0.5%. Actual 0.6%

Thursday (March 31)

  • 7:30 US Challenger Job Cuts
  • 8:30 US Unemployment Claims. Estimate 266K
  • 9:45 US Chicago PMI. Estimate 50.5
  • 10:30 US Natural Gas Storage. Estimate -20B
  • 17:00 US FOMC Member William Dudley Speaks
  • 18:30 Australian Manufacturing Index

Upcoming Key Events

Friday (April 1)

  • 12:30 US Average Hourly Earnings. Estimate 0.2%.
  • 12:30 US Nonfarm Employment Change. Estimate 206K
  • 12:30 US Unemployment Rate. Estimate 4.9% 

*Key releases are highlighted in bold

*All release times are DST

AUD/USD for Thursday, March 31, 2016

AUD/USD March 31 at 5:30 DST

AUD/USD  Open: 0.7657 Low: 0.7623 High: 0.7683 Close: 0.7676

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7385 0.7472 0.7560 0.7678 0.7796 0.7913
  • AUD/USD posted small losses in the Asian session but has recovered in European trade
  • 0.7678 remains under pressure as resistance and could break during the day
  • 0.7560 has strengthened in support
  • Current range: 0.7560 to 0.7678

Further levels in both directions:

  • Below: 0.7560, 0.7472, 0.7385 and 0.7213
  • Above: 0.7678, 0.7796 and 0.7913

OANDA’s Open Positions Ratio

The AUD/USD ratio remains unchanged this week, despite strong gains by AUD/USD. Short positions have a majority (55%), indicative of trader bias towards AUD/USD reversing directions and losing 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.