AUD/USD – Lower on Weak Aussie Data

AUD/USD is lower in Thursday trading, as the Aussie struggles to stay above the 0.93 in Thursday trading. In economic news, Australia releases failed to impress, as Wage Price Index and New Motor Vehicle Sales posted weak readings. MI Inflation showed little change, with a gain of 1.9%. In the US, there are two key releases – Trade Balance and the all-important Unemployment Claims. As well, incoming Federal Reserve Chair Janet Yellen will testify before the Senate Banking Committee, ahead of her confirmation hearing.

Australian releases continue to struggle. Wage Price Index, a leading inflation indicator, rose 0.5%, missing the estimate of 0.8%. This weak figure was the smallest gain in more than six years, pointing to weak inflation in the fragile Australian economy. New Motor Vehicle Sales, a key gauge of consumer spending, posted a decline of -07%, its third decline in four months. The Australian dollar remains soft and has lost around 200 points against the US currency in the past week.

Incoming Federal Reserve head Janet Yellen will testify before the powerful Senate Banking Committee on Thursday. The hearing could be a rough one for Yellen, as Republicans are expected to grill her on the Fed’s QE program, which they oppose. Yellen is considered dovish in her monetary outlook and supported Bernard Bernanke in implementing QE, which currently stands at $85 billlion each month. On Wednesday, Yellen said that the economy is not performing up to its potential and unemployment remains too high.

It’s been an unusually quiet week so far in the US, with no major events due for release until Thursday. However, the dollar is managing just fine, riding on the coattails of Friday’s superb Non-Farm Payrolls. The markets had very low expectations from the key indicator, one of the most important economic releases. The estimate for the October release stood at just 121 thousand, as there was concern that the reading would be artificially low due to the government shutdown in October. However, the indicator put those concerns to rest, as the indicator soared to 204 thousand, its highest level in eight months. The outstanding NFP figure bolstered the US dollar against the major currencies, and has increased speculation that the Fed might press the tapering trigger in December. Such talk could bolster the US currency, as a reduction in QE is bullish for the dollar. At the same time, speculation about a scaling down in QE introduces some uncertainty and volatility in the currency markets.

AUD/USD for Thursday, November 14, 2013

AUD/USD November 14 at 13:30 GMT

AUD/USD 0.9302 H: 0.9386 L: 0.9281

AUD/USD Technical

• AUD/USD is rangebound in Thursday trading, as the pair sticks close the 0.93 line.
• On the upside, the pair is testing resistance at 0.9305. This is followed by resistance at the round number of 0.9400.
• AUD/USD pair is receiving support at 0.9229. This is followed by a support line at 0.9229, which has remained intact since mid-September.
• Current range: 0.9229 to 0.9305

Further levels in both directions:

• Below: 0.9229, 0.9119, 0.9000 and 0.8926
• Above: 0.9305, 0.9400, 0.9508, 0.9613 and 0.9700

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions in Thursday trading. This is not reflected in the current movement of the pair, as the Australian dollar has lost ground. The ratio is made up of a majority of open long positions, reflecting a trader bias towards the Australian dollar reversing direction and moving to higher ground.

The Aussie remains under pressure as it tries to stay in 0.93 territory. With the US releasing trade balance and unemployment data later in the day, we could see some volatility from AUD/USD in the North American session.

AUD/USD Fundamentals

• 12:00 Federal Chairman Bernard Bernanke Speaks.
• 13:30 US Trade Balance. Estimate -38.7B.
• 13:30 US Unemployment Claims. Estimate 331K.
• 13:30 US Preliminary Non-Farm Productivity. Estimate 1.3%.
• 13:30 US Preliminary Unit Labor Costs. Estimate 1.1%.
• 15:00 Federal Reserve Chairperson-Designate Janet Yellen Testifies. Yelllen will testify before the Senate Banking Committee.
• 15:30 US Natural Gas Storage. Estimate 21B.
• 16:00 US Crude Oil Inventories. Estimate 0.7M.
• 18:01 US 30-year Bond Auction.

*Key releases are highlighted in bold

*All release times are GMT

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