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AUD/USD – Aussie Under Pressure as GDP Slips

AUD/USD remains under pressure on Wednesday, as the pair struggles to stay above the 0.84 line. The Aussie remains in a sharp downward trend, having lost about 350 points in the past two weeks. On the release front, Australian GDP slipped to 0.3% in Q3, missing expectations. In the US, ADP Nonfarm Employment Change slipped to 208 thousand, well off expectations. ISM Non-Manufacturing PMI looked sharp in November, improving to 59.3 points.

Australian GDP was a disappointment, as the key indicator fell to 0.3% in Q3, the weakest quarterly gain in over three years. The markets had expected a gain of 0.7%. Earlier in the week, there were no surprises from the RBA, which held interest rates at 2.50%, a record low. RBA Governor Glenn Stevens reiterated that the central bank plans to keep rates at ultra-low levels for the near future. The RBA has been reluctant to tinker with rate levels, which have remained steady since August 2013. There was some good news from Building Approvals, which jumped 11.4% in October, crushing the estimate of 5.2%. This was the indicator’s strongest showing since September 2013.

US jobless claims did not impress, as ADP Nonfarm Employment Change fell to 208 thousand, down from 230 thousand in the previous release. This was well short of the estimate of 223 thousand. We’ll get a look at the official Nonfarm Employment Change report on Friday, with the markets expecting a strong reading of 231 thousand. Will the indicator meet or  beat expectations?

The US manufacturing sector continues to expand, as ISM Manufacturing PMI remained strong in November. The index came in at 58.7 points, close to the previous release of 59.0 points, which marked a three-year high. The positive US manufacturing data stands in sharp contrast to the situation in the Eurozone and China. In the Eurozone, manufacturing PMIs in France, Germany and Italy contracted in November. In China, the world’s second largest economy, Manufacturing PMI edged down to 50.3 points, down from the previous reading of 50.8 points.

AUD/USD for Wednesday, December 3, 2014

AUD/USD December 3 at 15:00 GMT

AUD/USD 0.8408 L: 0.8466 H: 0.8389


AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.8150 0.8240 0.8315 0.8456 0.8550 0.8668


Further levels in both directions:


OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Wednesday, reversing the direction we have seen since late last week. This is not consistent with the movement of the pair, as the Australian dollar has posted small losses. The ratio has a majority of long positions, indicative of trader bias towards AUD/USD moving higher.

AUD/USD Fundamentals

*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 [4]

Currency Analyst at Market Pulse [5]
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.