AUD/USD – Aussie Surges to 8-Month Highs

The Australian dollar has posted strong gains on Thursday, continuing the trend we saw in the Wednesday session. AUD/USD is trading at 0.7630 in the North American session. On the release front, Australian Employment Change disappointed on Wednesday, posting a negligible gain of 0.3 thousand. There are no Australian events on Thursday. Over in the US, the Philly Fed Manufacturing Index jumped 12.4 points, crushing the estimate of -1.4 points. However, employment data was soft, as both Unemployment Claims and JOLTS Job Openings both dropped compared to their previous releases.

Australian Employment Change posted a small gain of 0.3 thousand, nowhere near the forecast of 11.6 thousand. The unemployment rate dropped to 5.8 percent, down from 6.0 percent. However, analysts attributed this to the participation rate falling, as more unemployed people stopped looking for work. The surging Aussie shrugged off the soft Employment Change reading, as AUD/USD has climbed about 80 points on the day. The currency jumped over 100 points after the Federal Reserve opted not to raise rates and released a dovish statement. The Australian dollar has enjoyed a superb March, jumping close to 500 points against its US counterpart.

There were no surprises from the widely-anticipated Federal Reserve rate announcement on Wednesday. The remained on the sidelines and did not raise interest rates at its policy meeting on Wednesday, maintaining the benchmark rate at 0.25%. The Fed statement noted that the US economy remains vulnerable to an uncertain global economy, but expects to raise rates later in the year due to moderate growth and “strong job gains”. The statement was dovish in tone, a clear departure from the December meeting, when the Fed raised rates for the first time in nine years and talked about four rate hikes over the course of 2016. In just a short three months, global demand has weakened, precipitated by the Chinese slowdown, and US numbers have cooled in comparison to the economy’s torrid pace in the second half of 2015. If inflation and employment numbers push higher in next several months, a rate hike in mid-2016 seems a good bet.

AUD/USD Fundamentals

Wednesday (March 16)

• 20:30 Australian Employment Change. Estimate 11.6K. Actual 0.3K
• 20:30 Australian Unemployment Rate. Estimate 6.0%. Actual 5.8%

Thursday (March 17)

• 8:30 US Philly Fed Manufacturing Index. Estimate -1.4. Actual +12.4 points
• 8:30 US Unemployment Claims. Estimate 267K. Actual 265K
• 8:30 US Current Account. Estimate -117B. Actual -125B
• 10:00 US JOLTS Job Openings. Estimate 5.57M. Actual 5.54M
• 10:00 US CB Leading Index. Estimate 0.2%. Actual 0.1%
• 10:30 US Natural Gas Storage. Estimate -9B. Actual -1B 

*Key releases are highlighted in bold

*All release times are DST

AUD/USD for Thursday, March 17, 2016

AUD/USD March 17 at 12:00 DST

AUD/USD  Open: 0.7461 Low: 0.7437 High: 0.7476 Close: 0.7634

AUD/USD Technical

• AUD/USD has posted strong gains, breaking through two resistance lines
• 0.7560 has switched to a support role
• 0.7678 is a weak resistance line
• Current range: 0.7560 to 0.7678

Further levels in both directions:

• Below: 0.7560, 0.7472, 0.7385 and 0.7213
• Above: 0.7678, 0.7796 and 0.7913

OANDA’s Open Positions Ratio

The AUD/USD ratio is unchanged, despite strong gains by AUD/USD. Short positions currently have a strong majority (55%), indicative of trader bias towards AUD/USD reversing directions and moving lower.

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.