AUD/USD – Aussie Starts Week With More Gains

The Australian dollar continues to push higher, as AUD/USD is trading in the mid-0.90 range late in Monday’s European session. The Aussie has rebounded sharply, gaining 150 points since Thursday. In economic news, Australian ANZ Job Advertisements was marked by another decline, while Home Loans posted a strong gain and matched the estimate. In the US, today’s sole release is the Federal Budget.

Australian releases were mixed to start off the new trading week. ANZ Job Advertisements continues to struggle, posting a December release of -0.7%. This was the indicator’s third straight decline in what was a weak 2013. Home Loans showed little change, posting a respectable gain of 1.1%, which matched the forecast.

US employment numbers started 2014 on a positive note, but Friday’s Non-Farm Payrolls was dismal, posting its lowest gain since May 2012. The key employment indicator dropped to just 74 thousand, down from 203 thousand a month earlier. This was nowhere near the estimate of 196 thousand.  Although the unemployment rate dropped to 6.7%, this was due to a drop in the participation rate, which fell to 62.8%, its lowest level since 1978. This figure points to a worrying trend of a jobless US recovery.

Friday’s disappointing Non-Farm Payrolls report may create some concern in the markets, but is unlikely to change the Federal Reserve’s path of tapering QE, which it started just this month. In December, outgoing Fed chair Bernard Bernanke strong hinted that the Fed planned to wind up QE by the end of 2014, reducing the asset-purchase program by increments of $10 billion at each meeting. The Fed next meets for a policy meeting on January 28, and the question is will the Fed reduce QE by another $10 billion, down to $65 billion each month. Most analysts feel that one bad employment report will not affect the taper schedule and we will see a reduction in QE at the next meeting.  

AUD/USD for Monday, January 13, 2014

AUD/USD January 13 at 12:30 GMT

AUD/USD 0.9054 H: 0.9073 L: 0.8986

AUD/USD Technical

• AUD/USD has posted gains in Monday trading. The pair barreled across the key 0.90 line in the Asian session and continues to gain ground in European trading.
• The key level of 0.9000 has reverted to a support role. This is followed by stronger support at 0.8893.
• 0.9119 is the first line of resistance. It is followed by resistance at 0.9229.
• Current range: 0.9000 to 0.9119

Further levels in both directions:

• Below: 0.9000, 0.8893, 0.8735, 0.8658 and 0.8505
• Above: 0.9119, 0.9229 and 0.9305 and 0.9448

OANDA’s Open Positions Ratio

AUD/USD is unchanged in Monday trading. This is not consistent with what we are seeing from the pair, as the Aussie continues to move upwards. AUD/USD is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar continuing to move higher against the US currency.

AUD/USD is moving higher in Monday trading. The pair has steadied late in European trading, and with no major US releases today, we could be in for more of the same in the North American session.

AUD/USD Fundamentals

• 00:30 Australian ANZ Job Advertisements. Actual -0.7%.
• 00:30 Australian Home Loans. Estimate 1.1%. Actual 1.1%.
• 19:00 US Federal Budget Balance. Exp. 44.3B.

*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.