AUD/USD – Aussie Unchanged in Light Holiday Trade

The Australian dollar is almost unchanged on Monday, following two losing daily sessions. AUD/USD is trading just above the 0.77 line in the European session. In economic news, Australian markets are closed for ANZAC Day. It’s a quiet day in the US, with just one event on the schedule – New Home Sales. The markets are expecting an improvement in the March report, with an estimate of 521 thousand. On Tuesday, Australia releases CPI, the primary gauge of consumer inflation. The US will publish two major events – Core Durable Goods Orders and CB Consumer Confidence.

On Thursday, the Australian NAB Quarterly Business Confidence dipped to 4 points in the first quarter, down from the reading of 5 points in Q4 (revised from 4 points). Although the indicator softened, it still is pointing to optimism over the economy on the part of the business sector. Earlier last week, the RBA released the minutes of its April policy meeting. The central bank reiterated, as it has on many occasions, that it would cut rates if warranted by economic conditions. Policymakers also expressed concern about the appreciation of the Australian dollar, which has surged 7.7 percent since February 1. It should be kept in mind, however, that in the past when the RBA has felt that the Aussie is overvalued, it has tried to “talk down” the currency rather than take the drastic move of lowering interest rates. The RBA would certainly prefer an exchange rate closer to US 70 cents, but it is unlikely to cut interest rates unless inflation levels weaken.

The US labor market continues to impress, as the weekly unemployment claims indicator fell to 247 thousand, well below the forecast of 265 thousand. This was the lowest weekly count since November 1973, and the four-week indicator, which is considered more accurate, also dropped compared to the previous release. The good news was tempered by a disappointing key manufacturing report. The Philly Fed Manufacturing Index surprised the markets with a decline of -1.6 points, as the estimate stood at 8.1 points. This reading marked the third decline in four readings, as the manufacturing sector remains a weak area of the US economy. Uncertainty in global economic conditions has lead to weaker demand for US goods and put the squeeze on domestic manufacturers. On Friday, Flash Manufacturing PMI dipped to 50.8 points, shy of the forecast of 51.9 points. Although the reading did point to a slight improvement in manufacturing business conditions, it marked the PMI’s weakest release since September 2009.

AUD/USD Fundamentals

Monday (April 25)

  • 10:00 US New Home Sales. 521K

Tuesday (April 26)

  • 18:30 US Core Durable Goods Orders. Estimate 0.6%
  • 10:00 US CB Consumer Confidence. Estimate 95.8 points
  • 21:30 Australian CPI. Estimate 0.2%

*All release times are EDT

AUD/USD for Monday, April 25, 2016

AUD/USD April 25 at 6:55 EDT

Open: 0.7709 Low: 0.7690 High: 0.7726 Close: 0.7714

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.7472 0.7560 0.7678 0.7796 0.7913 0.8054
  • AUD/USD has shown limited movement in the Asian and European sessions
  • 0.7678 is providing weak support
  • There is resistance at 0.7796
  • Current range: 0.7678 to 0.7796

Further levels in both directions:

  • Below: 0.7678, 0.7560 and 0.7472
  • Above: 0.7796, 0.7913, 0.8054 and 0.8163

OANDA’s Open Positions Ratio

On Monday, the AUD/USD ratio is showing long and short positions almost evenly split. This is indicative of a lack of trader bias as to what direction AUD/USD will take next.

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.