AUD/USD – Australian Dollar Steadies After Recent Losses

AUD/USD is steady on Friday, after posting losses on the previous day. The pair is trading in the mid-0.92 range in the European session. In the US, Unemployment Claims were down sharply, but this was apparently due to a computer glitch which resulted in an incomplete count of claims. Friday will be busy, with the US releasing four key events – Core Retail Sales, Retail Sales, PPI, and UoM Consumer Sentiment. There are no Australian releases on Friday.

Australian releases have been positive recently, but Employment Change failed to keep pace on Thursday. The key indicator declined for the second straight month, with a reading of -10.8K in August. This shocked the markets, which had expected a strong gain of 10.2 thousand. The Unemployment Rate edged higher, from 5.7% to 5.8%. The Aussie lost ground on Thursday, but has looked very sharp since the start of September, when the currency was struggling at the 0.89 line.

In the US, it was the opposite story as Unemployment Claims fell to just 292 thousand in August, down from 323 thousand the previous month. However, the Department of Labor stated that the drop was due to computer upgrades in two states, which resulted in some claims not being processed. Even so, unemployment claims are looking positive. The four-week average, which is a less volatile measurement, dropped to 321,000, its lowest level since 2007. If employment data continues to improve, we could see the Fed pull the tapering trigger sooner rather than later.

The Syrian crisis has taken on a new twist, as US military action, which seemed a foregone conclusion in late August, is currently on the backburner. The US and Russia are spearheading intensive efforts to come up with a diplomatic solution to the crisis. Under the proposed plan, Syria would hand over its entire arsenal of chemical weapons to the international community to be destroyed. Speaking on US television earlier in the week, President Obama said that he would delay any military action as long as a diplomatic solution was possible, but that a strike against Syria was still on the table. If the diplomatic efforts gain momentum and the crisis eases, we could see the safe-haven dollar lose ground.

 

AUD/USD for Friday, September 13, 2013

Forex Rate Graph 21/1/13
 

AUD/USD September 13 at 9:45 GMT

AUD/USD 0.9254 H: 0.9267 L: 0.9224

 

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9089 0.9135 0.9221 0.9328 0.9400 0.9508

 

  • AUD/USD is showing little movement in Friday trading. The pair dropped to a low of 0.9224 late in the Asian session but has moved higher.
  • The pair continues to face resistance at 0.9328. This line has some breathing room as the pair trades at lower levels. This is followed by resistance at the round number of 0.94. This line has remained in place since mid-June.
  • On the downside, the pair is receiving support at 0.9221. This is a weak line which could be face strong pressure if the Aussie continues to lose ground. This is followed by stronger support at 0.9135.
  • Current range: 0.9221 to 0.9328

 

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 ratio is unchanged in Friday trading. This is reflective of what we are currently seeing from the pair, which is trading quietly. We have seen a significant shift in September in favor of short positions, due to the sharp rise of the Australian dollar. However, long positions still command a sizeable majority of the open positions, indicating a bias towards the Australian dollar resuming its upward movement.

AUD/USD is currently showing little movement, but we can expect to see some volatility later in the day, as the US releases four key events, each of which is a market-mover.

 

AUD/USD Fundamentals

  • 12:30 US Core Retail Sales. Estimate 0.3%.
  • 12:30 US Retail Sales. Estimate 0.5%.
  • 12:30 US Core PPI. Estimate 0.2%.
  • 12:30 US PPI. Estimate 0.2%.
  • 13:55 US Preliminary UoM Consumer Sentiment. Estimate 82.6 points.
  • 13:55 US Preliminary UoM Inflation Expectations.
  • 14:00 US Business Inventories. Estimate 0.4%.

 

*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.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.