The Australian dollar is showing limited movement on Monday, as AUD/USD trades at 0.6980 in the European session. On the release front, the week kicked off on a sour note as Australian NAB Business Confidence slipped to 3 points. On Monday, the Australian markets are closed for Australia day. There are no US releases on the schedule, so it’s unlikely that the Australian dollar will show much movement during the day. On Tuesday, we’ll get a look at a pair of key releases, as the US releases CB Consumer Confidence and Australia publishes CPI.
AUD/USD posted strong gains last week, climbing 140 points and closing at the symbolic 70 line. The Aussie took advantage of weak US inflation and employment numbers. The US Consumer Price Index, the primary gauge of consumer inflation, declined 0.1%, short of the estimate of 0.0%. Core CPI also softened, posting a gain of 0.1%. This was short of the forecast of 0.2%. Meanwhile, US jobless claims jumped to their highest level in 11 months, as the reading of 293 thousand was much worse than the estimate of 279 thousand.
US inflation numbers remain low, which has proven to be a sore spot in a generally strong US economy. This was underscored last week, as key inflation numbers missed their estimates. CPI dropped 0.1%, short of the estimate of 0.0%. Core CPI also softened, posting a gain of 0.1%. This was short of the forecast of 0.2%. Weak inflation indicators remain a concern for Federal Reserve policymakers, who must decide whether another interest rate hike would be appropriate in early 2016. Meanwhile, US jobless claims jumped to their highest level in 11 months, as the reading of 293 thousand was much worse than the estimate of 279 thousand. Will these weak numbers dampen Fed enthusiasm for a rate hike? There is speculation that the Fed could make a move in March, contingent on the strength of the US economy. A lack of inflation points to slack in the economy, and the Fed could hold off on another hike until inflation levels improve.
Monday (Jan. 25)
- There are no Australian or US releases on Monday
Upcoming Key Events (Jan. 26)
- 10:00 US CB Consumer Confidence. Estimate 96.6 points
*Key events are in bold
*All release times are EST
AUD/USD for Monday, January 25, 2016
AUD/USD January 25 at 7:05 EST
AUD/USD Open: 0.6999 Low: 0.6956 High: 0.7031 Close: 0.6980
- The pair posted gains in the Asian session but retracted in European trade
- 0.6931 is a weak support line
- There is resistance at 0.7063
- Current range: 0.6931 to 0.7063
Further levels in both directions:
- Below: 0.6931, 0.6848, 0.6754 and 0.6625
- Above: 0.7063, 0.7100 and 0.7213
OANDA’s Open Positions Ratio
AUD/USD ratio is showing little movement, reflective of a lack of movement from the pair. The ratio is close to an even split between long and short positions, indicative of a lack of trader bias as to which direction the pair will take next.