AUD/USD – Aussie Steady, US Durables and Jobless Claims Impress

AUD/USD is showing limited movement on Thursday, as the pair continues to have a listless week. In the North American session, the pair is trading at the 0.77 level. On the release front, US durable goods reports easily beat expectations and unemployment claims dropped and beat the estimate. There are no Australian releases for the remainder of the week. On Friday, the US releases Preliminary GDP and we’ll also hear from Federal Reserve chair Janet Yellen at the Jackson Hole conference.

After some dismal readings in the second quarter, US durable goods recovered in July. Core Durable Goods Orders rebounded after two declines, posting an excellent gain of 1.5%. This easily beat the forecast of 0.4%. Durable Goods Orders also impressed with a sharp gain of 4.4%, compared to the forecast of 3.4%. This marked the strongest gain since January. The strong readings point to stronger demand for durable goods, which should translate into increased investment and hiring in the business sector. There was more good news on the labor front, as unemployment claims dropped to 261 thousand, its third decline in as many weeks.

In Australia, Construction Work Done declined 3.7% in the second quarter, compared to an estimate of -1.9%. The indicator has managed just one gain in the past nine quarters, pointing to ongoing weakness in the construction industry. The poor reading could have a negative impact on second quarter GDP, which will be released on September 6. The economy will be hard-pressed to replicate first-quarter growth, which recorded an impressive gain of 1.1 percent.

After a mostly uneventful week, the markets will shift their attention to scenic Wyoming, where central bankers and other senior policymakers meet for a 3-day summit at Jackson Hole. With investors sticking to the sidelines ahead of the meeting, there has been a notable lack of movement in the currency markets so far this week. The markets will be looking for hints from Federal Reserve chair Janet Yellen regarding the Fed’s monetary plans, particularly the timing of a rate hike. Federal policymakers are divided over a rate hike, as the US labor market is red-hot, but inflation levels remains very low. Fed chair Janet Yellen will address the conference on Friday, and the markets will be looking for some feedback about the labor market and the inflation picture. As well, the US will release Preliminary GDP for the second quarter. In July, a soft Advance GDP sent the dollar downwards, as the economy expanded 1.2%, well short of the forecast of 2.6%. The estimate for the Preliminary GDP report stands at 1.1% and an unexpected reading could affect the movement of AUD/USD.

AUD/USD Fundamentals

Thursday (August 25)

  • 8:30 US Unemployment Claims. Estimate 265K. Actual 261K
  • 8:30 US Core Durable Goods Orders. Estimate 0.4%. Actual 1.5%
  • 8:30 US Durable Goods Orders. Estimate 3.4%. Actual 4.4%
  • 9:45 US Flash Services PMI. Estimate 51.9. Actual 50.9
  • 10:30 US Natural Gas Storage. Estimate 22B. Actual 11B
  • All Day – Jackson Hole Symposium

Friday (August 26)

  • 8:30 US Preliminary GDP. Estimate 1.1%
  • 10:00 Federal Reserve Chair Janet Yellen Speaks
  • 10:00 US Revised UoM Consumer Sentiment. Estimate 90.6
  • All Day – Jackson Hole Symposium

*All release times are EDT

* Key events are in bold

AUD/USD for Thursday, August 25, 2016

AUD/USD August 25 at 10:35 EDT

Open: 0.7607 High: 0.7639 Low: 0.7602 Close: 0.7612

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7339 0.7440 0.7560 0.7701 0.7835 0.7938
  • AUD/USD has showed limited movement in the Asian session and European sessions. The pair has posted small gains in North American trade
  • There is resistance at 0.7701
  • 0.7560 is providing support
  • Current range: 0.7560 to 0.7701

Further levels in both directions:

  • Below: 0.7560, 0.7440 and 0.7339
  • Above: 0.7701, 0.7835, 0.7938 and 0.8045

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Thursday, reflective of the lack of movement from AUD/USD. Currently, short and long positions are almost evenly split, indicative of a lack of trader bias as to what direction AUD/USD 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.