- MarketPulse - https://www.marketpulse.com -

AUD/USD – Aussie Steady, Consumer Confidence Next

The Australian dollar is unchanged on Tuesday. At the start of the North American session, the pair is trading at 0.7450. On the release front, Australian NAB Business Confidence edged up to 3 points. Later in the day, Australia releases Westpac Consumer Sentiment and Home Loans. In the US, the sole event on the schedule is the NFIB Small Business Index. The indicator slipped to 92.9 points, missing expectations.

The impressive Aussie rally has continued this week. AUD/USD climbed close to the 0.75 level on Monday, its highest level since July 2015. The currency has struggled in recent months, hard hit by the China slowdown and uncertainty in the markets with the plunge in oil prices. However, the pair has rebounded back with a vengeance as oil prices have improved and investors appear to be more comfortable holding risk assets like the Aussie. NAB Business Confidence edged up to 3 points, up from 2 points a month earlier. The markets will be looking for more good news from Westpac Consumer Sentiment. The RBA’s continues to maintain an easing bias, and Deputy Governor Philip Lowe stated that this policy is unlikely to change, noting that weak wage growth continues to weigh on inflation levels.

Last week’s US job data was mixed. Nonfarm Payrolls impressed with a reading of 242 thousand in January, much higher than the estimate of 195 thousand. This was much stronger than the previous (revised) reading of 171 thousand. The US economy has added an average of 225,000 jobs per month since December, an impressive number considering that the economy has softened in the early part of 2016. Still, employment news was mixed, as wage growth declined by 0.1%, shy of the estimate of a 0.2% gain [1]. This marked the first drop in wages since December 2014. This indicator is closely linked to inflation, since an increase in wages means workers have more money to spend. The indicator’s decline means that that Federal Reserve’s inflation target of about 2.0% remains far off, so the Fed, which is keeping a close eye on the weak inflation picture, is unlikely to press the rate trigger at its policy meeting later this month.

AUD/USD Fundamentals

Monday (March 7)

Tuesday (March 8)

*Key releases are highlighted in bold

*All release times are EST

AUD/USD for Tuesday, March 8, 2016

AUD/USD March 8 at 8:25 EST

AUD/USD  Open: 0.7455 Low: 0.7410  High: 0.7463 Close: 0.7454

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7100 0.7213 0.7385 0.7472 0.7560 0.7678

Further levels in both directions:

OANDA’s Open Positions Ratio

The AUD/USD ratio is unchanged, reflective of the lack of movement from AUD/USD. Long positions have a slim majority (53%), which is indicative of slight trader bias towards AUD/USD continuing to move higher.

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 [5]

Market Analyst at OANDA [6]
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.
Kenny Fisher

Latest posts by Kenny Fisher (see all [5])