AUD/USD – Little Movement As ADP Non-Farm Payrolls Shines

AUD/USD is trading quietly in Wednesday trading, as the pair is slightly above the 0.89 line late in the European session. In economic news, ADP Non-Farm Employment Change improved in December and posted a twelve-month high. Later in the day, the Federal Reserve will release the minutes of its most recent policy meeting. There are no Australian releases on Wednesday, but we’ll get a look at two key events early on Thursday, with the release of Building Approvals and Retail Sales.

With the markets keeping a close eye on US employment releases, ADP Non-Farm Payrolls looked excellent. The key indicator climbed to 238 thousand, up from 215 thousand a month ago. This easily surpassed the estimate of 199 thousand. We’ll get a look at Unemployment Claims on Thursday, followed by the all-important Non-Farm Payrolls on Friday. With another QE taper in January a strong possibility, every employment release will be under the market microscope and could impact on the currency markets.

As expected, the US Senate confirmed Susan Yellen as chair of the Federal Reserve by a wide margin on Monday. Yellen becomes the first woman to head the powerful central bank. She has been a strong supporter of outgoing chair Bernard Bernanke, who lowered interest rates and implemented a QE program in order to boost a struggling US economy. Yellen takes over the helm on February 1, and will chair her first policy meeting in March.

On Friday, outgoing Federal Reserve Chair Bernard Bernanke gave a cautious thumbs-up to the US economy, saying that we could be in for a period of faster growth. Bernanke is winding up his eight years at the helm of the Fed, which included implementing a QE program in order to deal with a severe economic and financial crisis. The Fed has started to taper QE, with a cut of $10 billion to the $85 billion in assets which the Fed has been purchasing each month. The Fed will meet at the end of January, and another taper of $10 billion is a strong possibility. Meanwhile, Bernanke reiterated that the QE taper did not mean that interest rates would be increased.

AUD/USD for Wednesday, January 8, 2013

AUD/USD January 8 at 13:35 GMT

AUD/USD 0.8915 H: 0.8968 L: 0.8911

AUD/USD Technical

• AUD/USD is steady in Wednesday trading.
• On the upside, the next resistance line is at the round number of 0.9000. This is followed by resistance at 0.9119.
• On the downside, 0.8893 continues to provide support. This weak line could face strong pressure if the Aussie resumes its downward movement. The next support level is 0.8735, which has held firm since July 2010.
• Current range: 0.8893 to 0.9000

Further levels in both directions:

• Below: 0.8893, 0.8735, 0.8658, 0.8505 and 0.8411
• Above: 0.9000, 0.9119, 0.9229 and 0.9305

OANDA’s Open Positions Ratio

AUD/USD is almost unchanged in Wednesday trading. This is consistent with what we are seeing from the pair, which is showing very little movement. AUD/USD is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar breaking out and moving higher against the US currency.

The pair shrugged off a strong US employment release earlier in the day. The US will release the Federal Reserve minutes later in the day, so we could see some movement from AUD/USD during the North American session.

AUD/USD Fundamentals

• 13:15 US ADP Non-Farm Employment Rate. Estimate 199K. Actual 238K.
• 15:30 US Crude Oil Inventories. Estimate -1.6M.
• 18:01 US 10-year Bond Auction.
• 19:00 US FOMC Meeting Minutes.
• 20:00 US Consumer Credit. Estimate 14.8B.

*Key releases are highlighted in bold

*All release times are GMT

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.