AUD/USD: Steady as Australian Consumer Sentiment Sparkles

AUD/USD is stable on Wednesday, as the pair trades at the 0.94 line in the North American session. Australian Consumer Confidence looked sharp, jumping to an eight-month high. In the US, all eyes are on the release of the FOMC minutes later in the day.

Australian Consumer Sentiment jumped 1.9% in June, its highest level since last October. Analysts closely follow this indicator, since increased consumer confidence usually translates into stronger consumer spending, which is a critical component of economic growth. This release follows solid Australia data earlier in the week as NAB Business Confidence and ANZ Job Advertisements both improved in June. Will Employment Change continue the good news on Thursday?

The Federal Reserve returns to the spotlight on Wednesday, as the FOMC releases the minutes of its June policy meeting. The markets would love some clarity as to when the Fed is looking to raise interest rates. Any hints in this regard could send the currency markets scrambling. Based on updated Fed forecasts for inflation and unemployment, it’s safe to say that the Fed is cautiously optimistic about the pace of the US recovery.

US employment numbers continue to look sharp. On Tuesday, JOLTS Job Openings jumped to 4.64 million, easily beating the estimate of 4.53 million. This follows excellent figures from Nonfarm Payrolls and Unemployment Rate. Nonfarm Payrolls, one of the most important indicators, bounced back in June with a strong gain of 288 thousand new jobs. This crushed the estimate of 214 thousand. There was more good news from the Unemployment Rate, which continues to move downward. The indicator dipped to 6.1%, its lowest level since September 2008. The strong employment numbers are sure to increase speculation about an interest rate hike by the Federal Reserve, and remarks by Fed policymakers will be under the market microscope.

AUD/USD for Wednesday, July 9, 2014

AUD/USD July 9 at 15:15 GMT

AUD/USD 0.9400 H: 0.9416 L: 0.9390

AUD/USD Technical

• AUD/USD has hugged the 0.94 line throughout the day.
• On the downside, 0.9361 has some breathing room as the pair trades at higher levels. There is stronger support at 0.9229.
• 0.9446 is the next resistance line. This is followed by resistance at 0.9617.

Further levels in both directions:

• Below: 0.9361, 0.9229, 0.9119 and 0.9000
• Above: 0.9446, 0.9617, 0.9757 and 0.9842

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in short positions in Wednesday, reversing the trend from a day earlier. This is consistent with the movement of the pair, as the Australian dollar has posted slight losses. The ratio is evenly split between long and short positions, indicative of a lack of trader bias towards where the Australian dollar is headed.

AUD/USD Fundamentals

• 00:30 Australian Westpac Consumer Sentiment. Actual 1.9%.
• 14:30 US Crude Oil Inventories. Estimate -1.7M. Actual -2.4M.
• 17:01 US 10-year Bond Auction.
• 18:00 US FOMC Meeting Minutes.

*Key releases are highlighted in bold.

*All release times are GMT

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