AUD/USD – Aussie Unchanged, Markets Eye Friday’s Flurry of Key Events

The Australian dollar is almost unchanged on Thursday after gaining 50 points on Wednesday. In the North American session, AUD/USD is trading slightly above the 0.77 level. On the release front, it’s another quiet day. Australian MI Inflation Expectations dipped to 3.5%. There was more good news from the US labor market, as Unemployment Claims dropped to 266 thousand, beating expectations. Friday will be busy, as the US releases key retail sales, CPI and consumer confidence reports. Any unexpected readings could affect the movement of AUD/USD.

The Aussie has posted strong gains this week, buoyed by strong readings from business confidence and consumer confidence indicators. Westpac Consumer Sentiment rebounded after two straight declines, posting a gain of 2.0% in August. Earlier in the week, NAB Business Confidence posted a gain of plus-4 in July. Although not as strong as the plus-6 reading in June, this reading indicates that business sentiment remains high. These indicators are closely monitored, since strong confidence levels often translates into spending by consumers and the private sector, both of which are crucial for economic growth.

US employment numbers continue to look sharp. On Thursday, it was the turn of Unemployment Claims, which dropped to 266 thousand, beating the forecast of 272 thousand. Earlier this week, the Labor Market Conditions Index and JOLTS Job Openings both beat expectations. Last week, Nonfarm Payrolls sparkled, surprising the markets and buoying the US dollar. The July indicator surprised the markets with a huge gain of 255 thousand, crushing the estimate of 180 thousand. This release follows the outstanding June reading of 280 thousand. There was more positive news as Average Hourly Earnings gained 0.3%, edging above the forecast of 0.2%. Prior to the payrolls release, a September hike was virtually off the table, especially in light of the soft US GDP report in late July. However, the stellar job numbers will force the Fed to give serious thought to a move in September. Employment and inflation releases in the next few weeks will be critical factors in determining if the Fed makes a move next month, or waits until December before revisiting the rate question.

AUD/USD Fundamentals

Wednesday (August 10)

• 21:00 Australian MI Inflation Expectations. Actual 3.5%

Thursday (August 11)

• 8:30 US Unemployment Claims. Estimate 272K. Estimate 266K
• 8:30 US Import Prices. Estimate -0.2%. Actual 0.1%
• 10:00 US Mortgage Delinquencies
• 10:30 US Natural Gas Storage. Estimate 24B
• 13:01 US 30-year Bond Auction

*Key releases are highlighted in bold

*All release times are EDT

AUD/USD for Thursday, August 11, 2016

AUD/USD August 11 at 10:40 EDT

Open: 0.7711 High: 0.7726 Low: 0.7691 Close: 0.7720

AUD/USD Technical

• AUD/USD has shown limited movement throughout the Thursday session
• There is resistance at 0.7835
• 0.7701 was tested earlier in support. This line remains fluid and could see further action in the North American session
• Current range: 0.7701 to 0.7835

Further levels in both directions:

• Below: 0.7701, 0.7560, 0.7440 and 0.7339
• Above: 0.7835, 0.7938 and 0.8045

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged on Thursday, consistent with the lack of movement from AUD/USD. Short positions have a majority (55%), indicative of trader bias towards the pair breaking out and moving ground.

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.