AUD/USD – Aussie Unchanged, US Consumer Confidence Within Expectations

The Australian dollar is almost unchanged on Friday, following considerable losses in the Thursday session. The pair is trading at the 0.74 line in the North American session. On the release front, there are no Australian events on the schedule. In the US, UoM Consumer Sentiment came in at 94.3 points, just above the estimate. UoM Inflation Expectations dipped to 2.4%, marking a 4-month low.

Last week’s Nonfarm Payrolls of just 38,000 new jobs shocked the markets and sent the US dollar tumbling. A couple of minor employment indicators were soft, leading to some concern about the strength of the US labor market. However, these concerns should be laid to rest after key job numbers this week were solid and beat expectations. On Wednesday, JOLTS Job Openings improved to 5.79 million, easily beating the forecast of 5.67 million. Unemployment Claims followed suit with a strong reading. The indicator dropped to 264 thousand, compared to an estimate of 269 thousand. Significantly, this marked the lowest jobless report in six weeks. With the Federal Reserve mulling over a rate hike in the next few months, upcoming employment numbers will be especially significant, and any unexpected reading could result in volatility in the currency markets.

The Australian dollar is sensitive to key Chinese data, as the Asian giant is Australia’s number one trading partner. On Wednesday, Chinese CPI was unexpectedly weak in the year-to-year release for May, posting a gain of 2.0%. This was shy of the estimate of 2.3%, and the Aussie responded with losses of about 80 points. Chinese demand appears to have picked up in the second quarter, so the markets are hopeful that this weak inflation number is reflective of the drop in Chinese demand in the first quarter, which had significant negative repercussions for the global economy, and that inflation levels will pick up in the second quarter.

AUD/USD Fundamentals

Friday (June 10)

• 10:00 US Preliminary UoM Consumer Sentiment. Estimate 94.1. Actual 94.3
• 10:00 US Preliminary UoM Inflation Expectations. Actual 2.4%
• 14:00 US Federal Budget Balance. Estimate -56.2B

*Key releases are highlighted in bold

*All release times are EDT

AUD/USD for Friday, June 10, 2016

AUD/USD June 10 at 10:50 EDT

Open: 0.7413 Low: 0.7391 High: 0.7424 Close: 0.7399

AUD/USD Technical

• AUD/USD has been flat in the Friday session
• 0.7339 is providing support
• 0.7472 has strengthened in resistance following strong losses by AUD/USD in the Thursday session
• Current range: 0.7339 to 0.7472

Further levels in both directions:

• Below: 0.7339, 0.7251 and 0.7160
• Above: 0.7472, 0.7612 and 0.7339

OANDA’s Open Positions Ratio

AUD/USD ratio is almost unchanged on Friday, consistent with the lack of movement from AUD/USD. Long positions command a majority (55%), indicative of trader bias towards AUD/USD continuing to move higher.

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.