AUD/USD – Aussie Edges Higher, Business Confidence Next

The Australian dollar is almost unchanged on Monday, following considerable losses in the Thursday session. The pair is trading slightly under the 0.74 line in the North American session. On the release front, it’s a quiet start to the week, with no US events on the schedule. Australian markets are closed on Monday for a holiday, so we’re unlikely to see much movement from AUD/USD. Late Monday, Australia releases MI Inflation Expectations and NAB Business Confidence. On Tuesday, the US releases retail sales reports.

The April Nonfarm Payrolls report, which posted a weak gain of just 38 thousand, sent the US dollar tumbling and raised concerns about the strength of the US labor market. However, these concerns should be laid to rest after key job numbers last 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, employment numbers will be especially significant, and any unexpected reading could result in volatility in the currency markets. The Federal Reserve hold its policy meeting on Wednesday, with the markets expecting the Fed to hold rates at their current level of 0.25%.

The Australian dollar is sensitive to key Chinese data, as the Asian giant is Australia’s number one trading partner. Last week, 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

Monday (June 13)

• 21:00 Australian MI Inflation Expectations
• 21:30 Australian NAB Business Confidence

Upcoming Key Events

Tuesday (June 14)

• 8:30 US Core Retail Sales. Estimate 0.4%
• 8:30 US Retail Sales. Estimate 0.4%

*Key releases are highlighted in bold

*All release times are EDT

AUD/USD for Monday, June 13, 2016

AUD/USD June 13 at 9:10 EDT

Open: 0.7371 Low: 0.7358 High: 0.7411 Close: 0.7382

AUD/USD Technical

• AUD/USD posted small gains in the Asian and European sessions. The pair has retracted in North American trade
• 0.7339 is providing weak support
• 0.7472 is providing strong resistance
• 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 showing limited movement on Monday, consistent with the lack of movement from AUD/USD. Long positions command a majority (58%), 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.