AUD/USD – Sharp Business Confidence Lifts Aussie

The Australian dollar continues to plow higher, as it tests the 0.93 line in European trading on Tuesday. We have not seen AUD/USD at these levels since late July. The Aussie received a boost from NAB Business Confidence, which posted its highest level in over two years. In the US, today’s highlight is US JOLTS Job Openings, with the markets not expecting much change from this important employment indicator.

The Aussie is on a roll, and has gained almost four cents against the US dollar in the month of September. The currency was boosted on Tuesday by NAB Business Confidence, which jumped from -3 points in July to +6 points in August. This was the indicator’s best performance since June 2011. We’ll get a look at Consumer Sentiment on Wednesday and a strong release could see the impressive rally continue.

Australians voted for a change at the helm in national elections on the weekend. After six years of the Labor party in office, the electorate wanted a change, and got it. Liberal leader Tony Abbott won a landslide victory, with the Liberal-National coalition garnering 88 of the 150 seats in parliament. Abbott has promised to bring back budget surpluses and told cheering supporters that the country is “under new management and Australia is now open for business”.

The US ended last week on a disappointing note, as the all-important Non-Farm Payrolls came in at 169 thousand, missing the estimate of 178 thousand. The Unemployment Rate dropped from 7.4% to 7.3%, but this improvement is not all that significant, given the low participation rate in the labor force. The Fed continues to keep its cards away from prying market eyes, but we’re unlikely to see QE tapering without stronger employment numbers. Chicago Fed President Charles Evans hinted that we could see some action on this front from the Fed before the end of the year.

AUD/USD for Tuesday, September 10, 2013

AUD/USD September 10 at 13:30 GMT

AUD/USD 0.9298 H: 0.9300 L: 0.9230

AUD/USD Technical

• Resistance levels continue to crumble as AUD/USD continues to push higher as the pair trades above the 0.92 line. The pair touched a low of 0.9168 in the Asian session but has since recovered.
• The pair faces weak resistance at 0.9328. This is followed by stronger resistance at 0.9400. This line has remained in place since mid-June.
• On the downside, the pair is receiving support at 0.9221. This is followed by support at 0.9135.
• Current range: 0.9135 to 0.9221

Further levels in both directions:

• Below: 0.9221, 0.9135, 0.9089, 0.9000, 0.8926 and 0.8848
• Above: 0.9328, 0.9400, 0.9508 and 0.9613

OANDA’s Open Positions Ratio

AUD/USD continues to point to movement towards short positions in Tuesday trading. We have seen a significant shift in September in favor of short positions. This can be explained by the fact that as the Australian dollar moves sharply higher, numerous open long positions have been covered, leading to a greater percentage of open short positions.

The Australian dollar has had an excellent September, gaining close to four cents. With the US releasing employment data later in the day, we could see some volatility from the pair in the North American session.

AUD/USD Fundamentals

• 1:30 Australian NAB  Business Confidence. Actual 6 points.
• 11:30 US NFIB Small Business Index. Estimate 94.8 points. Actual 94.0 points.
• 14:00 US JOLTS Openings. Actual 3.96M.

*Key releases are highlighted in bold

*All release times are GMT

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.