AUD/USD – Aussie dips as ADP nonfarm payrolls sparkle

AUD/USD has posted slight losses on Wednesday, as the pair continues to trade quietly this week. Currently, the pair is at 0.7041, down 0.13% on the day. On the release front, Australian AIG manufacturing index improved to 54.8, pointing to expansion in the manufacturing sector. Commodity prices continued to accelerate, with a gain of 14.4%. In the U.S., ADP nonfarm payrolls soared to 275 thousand, crushing the estimate of 181 thousand. Will the official nonfarm payrolls follow suit on Friday? On the manufacturing front, ISM Manufacturing PMI slowed to 52.8, shy of the estimate of 55.0 points. Later, the FOMC will set the monthly benchmark rate and release a rate statement. On Thursday, the U.S. posts unemployment claims and Australia releases building approvals.

The U.S-China trade war has weighed heavily on the Australian economy, as China is Australia’s number one trading partner. China is gripped by a slowdown, and April manufacturing data was soft. Manufacturing PMI slowed to 50.1, missing the forecast of 50.7 points. The unofficial Caixin Manufacturing PMI followed the same trend, falling to 50.2. This missed the estimate of 51.0. Both indicators point to stagnation in the manufacturing sector, with readings barely in expansion territory. With the markets braced for a sharp drop of 12.5% in building approvals on Thursday, the Aussie could hit some headwinds this week.

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AUD/USD Fundamentals

Tuesday (April 30)

• 18:30 Australian AIG Manufacturing Index. Actual 54.8

Wednesday (May 1)

• 2:30 Australian Commodity Prices. Actual 14.4%
• 8:15 US ADP Nonfarm Employment Change. Estimate 181K. Actual 275K
  
• 9:45 US Final Manufacturing PMI. Estimate 52.4. Actual 52.6
  
• 10:00 US ISM Manufacturing PMI. Estimate 55.0. Actual 52.8
  
• 10:00 US Construction Spending. Estimate 0.3%. Actual -0.9%
  
• 10:00 US ISM Manufacturing Prices. Estimate 54.5. Actual 50.0
  
• 10:30 US Crude Oil Inventories. Estimate 1.3M. Actual 1.9M
  
• All Day – US Total Vehicle Sales. Estimate 17.1M
• 14:00 US FOMC Statement
• 14:00 US Federal Funds Rate. Estimate <2.50%
• 14:30 FOMC Press Conference
• Tentative – Australian HIA New Homes Sales

Thursday (May 2)

• 8:30 US Unemployment Claims. Estimate 220K
• Tentative – US Treasury Currency Report
• 18:30 Australian AIG Services Index
• 21:30 Australian Building Approvals. Estimate -12.5%

*All release times are EDT

* Key events are in bold

AUD/USD for Wednesday, May 1, 2019

Open: 0.7050 High: 0.7061 Low: 0.7035 Close: 0.7039

AUD/USD Technical

AUD/USD showed limited movement in the Asian session. The pair posted slight gains in European trade but then retracted. AUD/USD has resumed downward movement in the North American session

• 0.6970 is providing support
• 0.7085 is the next resistance line
• Current range: 0.6970 to 0.7085

Further levels in both directions:

• Below: 0.6970, 0.6825 and 0.6744
• Above: 0.7085, 0.7190, 0.7240, and 0.7315

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