AUD/USD – Steady As Markets Await Fed Statement

AUD/USD has edged lower in Wednesday trading, as the pair trades in the mid 0.92-range in the North American session. In the US, ADP Nonfarm Payrolls looked strong but Advance GDP slipped badly in March. Later in the day, the Federal Reserve releases a policy statement, and we could see another trim to QE. In Australia, Private Sector Credit met expectations. Later in the day, AIG Manufacturing Index will be released.

The ADP Nonfarm Payrolls were released on Wednesday, ahead of the critical official NFPs later in the week. The news was positive, as the indicator jumped to 220 thousand, marking a four-month low. This easily beat the estimate of 203 thousand. Advance GDP couldn’t keep pace, as the key indicator’s upward swing came to a crashing halt, with a Q1 gain of just 0.1%, compared to a 3.2% reading in Q4. This as well off the estimate of 1.2%. Is the US economy stalling? The weak reading could be a result of a harsh winter, but this will be of little consolation to the markets, and the dollar could lose ground against its major rivals.

The markets are keeping a close eye on the Federal Reserve, which will issue a policy statement later in the day. The Fed is expected to trim QE by another $10 billion, which would reduce the asset purchase scheme to $45 billion. If US numbers remain steady, the Fed plans to wind up QE before the end of 2014, at which time the guessing game of when interest rates might rise will begin in earnest. Meanwhile, further tapers to QE represent a vote of confidence in the US economy, so the greenback could post gains against the major currencies following another trim.

AUD/USD for Wednesday, April 30, 2014

AUD/USD April 30 at 14:25 GMT

AUD/USD 0.9261 H: 0.9296 L: 0.9253

AUD/USD Technical

• AUD/USD has edged lower in Wednesday trade. The pair pushed to a high of 0.9296 early in the European session.
• On the downside, 0.9229 is providing support. Next is 0.9119, which is protecting the key 0.9000 level.
• 0.9361 is a strong resistance line.
• Current range: 0.9229 to 0.9361.

Further levels in both directions:

• Below: 0.9229, 0.9119, 0.9000 and 0.8893
• Above: 0.9361, 0.9446, 0.9542, 0.9617 and 0.9703

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions on Wednesday, reversing the direction seen a day earlier. This is consistent with the movement of the pair, as the Aussie has edged lower. The ratio has a majority of long positions, indicative of trader bias towards the Australian dollar moving to higher ground.

AUD/USD is trading quietly on Wednesday. We could see some movement from the pair following the Fed policy announcement.

AUD/USD Fundamentals

• 1:30 Australian Private Sector Credit. Estimate 0.4%. Actual 0.4%.
• 12:15 US ADP Nonfarm Employment Change. Estimate 203K. Actual 220K.
• 12:30 US Advance GDP. Estimate 1.2%. Actual 0.1%.
• 12:30 US Advance GDP Price Index. Estimate 1.6%. Actual 1.3%.
• 12:30 US Employment Cost Index. Estimate 0.5%. Actual 0.3%.
• 13:45 US Chicago PMI. Estimate 56.6 points. Actual 63.0 points.
• 14:30 US Crude Oil Inventories. Estimate 1.3M. Actual 1.7M.
• 18:00 US FOMC Statement.
• 18:00 US Federal Funds Rate. Estimate <0.25%.
• 23:30 Australian AIG Manufacturing Index.

*Key releases are highlighted in bold

*All release times are GMT

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