AUD/USD – Aussie Slightly Higher, US Unemployment Claims Jump

The Australian dollar is up slightly on Thursday, as AUD/USD trades just above the 0.73 line early in the North American session. On the economic front, US Unemployment Claims rose to 287 thousand, which was above expectations. There are no Australian releases this week.

The US economy has shown strong improvement, but signs of weakness remain, such as the housing sector. On Wednesday, Pending Home Sales was unexpectedly soft, posting a decline of 0.9%, compared to an estimate of a 0.6% gain. Recent housing indicators have also fallen below expectations. Meanwhile, CB Consumer Confidence sparkled in the December report, as the key indicator jumped to 96.5 points, up sharply from 90.4 points a month earlier. This easily beat the estimate of 93.9 points. This excellent reading followed a solid UoM Consumer Sentiment, which improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high. Consumer confidence indicators are closely monitored by analysts, as stronger consumer confidence often translates into increased consumer spending, a key driver of economic growth. Strong consumer demand has been an important factor in the strength of the US economy, which led to the historic rate hike by the Federal Reserve earlier in December.

The Australian economy has not looked very sharp recently, but despite this the Australian dollar has enjoyed a strong fourth quarter. AUD/USD started the month of October at the symbolic 70 level, and has gained some 300 points, as it is currently trading above the 0.73 line. The Aussie has continued to head higher even after the Federal Reserve rate hike earlier this month, which has bolstered the greenback at the expense of other commodity-based currencies such as the Canadian dollar. Still, the recent rate hike is expected to be the first in a series of incremental rate hikes over the course of 2016, and higher interest rates means that the US dollar will become even more attractive to investors, which could lead to a reversal in the Australian dollar’s fortunes.

AUD/USD Fundamentals

Thursday (Dec. 31)

  • 00:30 Australian Private Sector Credit. Estimate 0.6%. Actual 0.4%
  • 13:30 US Unemployment Claims. Estimate 274K. Actual 287K
  • 14:45 US Chicago PMI. Estimate 50.4 points
  • 15:30 US Natural Gas Storage. Estimate -54B

*Key releases are highlighted in bold

*All release times are GMT

AUD/USD for Thursday, December 31, 2015

AUD/USD December 31 at 15:45 GMT

AUD/USD 0.7315 H: 07327 L: 0.7280

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7063 0.7100 0.7213 0.7349 0.7440 0.7526
  • AUD/USD posted slight gains in the Asian session. The pair has been marked by choppy movement during the European and North American sessions
  • 0.7213 is providing support
  • 0.7349 is a weak resistance line
  • Current range: 0.7213 to 0.7349

Further levels in both directions:

  • Below: 0.7213, 0.7100, 0.7063 and 0.6931
  • Above: 0.7349, 0.7440 and 0.7526

OANDA’s Open Positions Ratio

AUD/USD ratio is showing a slight majority for short positions (53%), indicative of trader bias towards the pair 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.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.