The Australian dollar remains range-bound this week. AUD/USD is currently trading at 0.7562, up 0.06% on the day. Although the Aussie isn’t making any waves, the currency is in rarified air, as it knocks on the door of the 0.76 level, which has held since June 2018.
Australia’s labour market is in decent shape, and we’ll get a look at November employment numbers early on Thursday (00:30 GMT). In October, the economy created a whopping 178.2 thousand jobs, but the upcoming forecast call for a more modest gain of 40.9 thousand. The unemployment rate is expected to remain steady at 7.0%. If the November numbers can meet or beat the consensus estimates, the Aussie could respond with gains.
Will FOMC shake up AUD/USD?
Economic conditions have deteriorated in the US, but the Fed is running low on monetary ammunition. Interest rates are close to zero and the Fed is already buying USD120 billion/mth in bond purchases in its QE scheme. At today’s FOMC meeting (19:30 GMT), Fed members could opt to extend the QE program, or more dramatically (but less likely) raise the amount of bond purchases. Either of these moves would likely weigh on the US dollar. If, however, the Fed decides that now is not the right time to make any moves, it could simply tinker with a change in language, the equivalent of throwing a bone to the markets, which are hungry for some dramatic announcement. With Congress inching towards a deal on a massive stimulus package, Fed members may decide to save any new measures until the New Year, once a stimulus program is in place and funds are flowing into the economy. Investors and traders will be watching closely, as the FOMC meeting could affect the movement of the US dollar.
With AUD/USD range-bound, the support and resistance lines remain unchanged:
- AUD/USD faces resistance at 0.7614, followed by resistance at 0.7693
- There is support at 0.7414. Close by, there is support at 0.7293
- The pair remains above the 10-day MA line
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