AUD/USD – Steady as RBA Says Rates to Remain Low

AUD/USD has posted slight gains on Friday, as the pair trades just below the 0.86 level. On the release front, the RBA policy statement said that monetary policy would remain accommodative. In the US, there are two key employment events on the schedule – Nonfarm Employment Change and the Unemployment Rate. Later in the day, Fed Chair Janet Yellen will speak at an event in Paris, France.

On Friday, the RBA released a policy statement, a quarterly event. The RBA said that it would continue its accommodative stance, which has seen interest rates held to 2.50% since August 2013. The RBA, which has constantly criticized the high value of the Aussie as weighing on the economy, drastically changed its tune this time, noting that low rates are supported by the recent weakening of the currency. On Thursday, there was good news on the employment front, as Employment Change bounded back nicely with a gain of 24.1 thousand, good enough to beat the estimate of 20.3 thousand. As expected, the Unemployment Rate edged up from 6.1% to 6.2%.

With the US recovery continuing to deepen, employment numbers continue to improve. This trend was underscored on Thursday, as Unemployment Claims fell to 278 thousand. This was better than the estimate of 285 thousand and marked a three-week low. This strong figure comes on the heels of the ADP Nonfarm Payrolls report, which climbed to 230 thousand, its strongest showing in 2014. The week wraps up with the official Nonfarm Payrolls release on Friday. The markets are expecting a downturn, with the estimate standing at 229 thousand. Will the key indicator surprise the markets and beat the forecast? If so, we could see some volatility in the currency markets.

AUD/USD for Friday, November 7, 2014

AUD/USD November 7 at 12:15 GMT

AUD/USD 0.8597 H: 0.8606 L: 0.8541

AUD/USD Technical

• AUD/USD tested support at 0.8550 in the Asian session before posting modest gains. This upward movement has continued in European trade.
• 0.8668 is an immediate resistance line. 0.8763 is next.
• 0.8550 remains a weak support level. 0.8456 is stronger.
• Current range: 0.8550 to 0.8668.

Further levels in both directions:

• Below: 0.8550, 0.8456, 0.8315 and 0.8240
• Above: 0.8668, 0.8763, 0.8820, 0.8953 and 0.9020

OANDA’s Open Positions Ratio

AUD/USD ratio is showing almost no change on Friday. This is consistent with what we’re seeing from the pair, as the Australian dollar has shown very small gains on the day. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD moving higher.

AUD/USD Fundamentals

• 00:05 US FOMC Member Loretta Mester Speaks.
• 00:30 RBA Monetary Policy Statement.
• 13:30 US Nonfarm Employment Change. Estimate 235K.
• 13:30 US Unemployment Rate. Estimate 5.9%.
• 13:30 US Average Hourly Earnings. Estimate 0.2%.
• 15:15 US Fed Chair Janet Yellen Speaks.
• 19:00 US Consumer Credit. Estimate 16.6B.
• 19:30 US FOMC Member Daniel Tarullo Speaks.

* Key releases are highlighted in bold

*All release times are GMT

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