AUD/USD – Aussie Drops Below 0.91 As US Unemployment Claims Shine

The Australian dollar continues to point downwards in Wednesday trading. AUD/USD has dipped below the 0.91 line, its lowest level since early September. The US dollar got a boost from a strong Unemployment Claims release. Australian Construction Work Done posted a strong gain, but this was not enough to prevent the Aussie from losing more ground.

In the US, Unemployment Claims continues to look sharp, as the key indicator dropped to 316 thousand, its lowest level in two months. This figure easily beat the estimate of 331 thousand. However, the news was not as good from the manufacturing sector, as Core Durable Goods Orders posted a drop of 0.1% for the third month running. The key indicator has not posted a gain since May. Durable Goods was awful, posting a decline of 2.0%, well below the estimate of a 1.5% drop.

The RBA continues to try and “talk down” the Australian dollar, which the Bank says is impeding economic growth due to its high value. Senior officials at the RBA continue to hammer home this message, and did not mince words in last week’s minutes, stating that “a lower level of the exchange rate would likely be needed to achieve balanced growth in the economy”. The Aussie lost about two cents last week, but this may not be enough for the RBA, which wants to see the currency below the 0.90 level. Clearly, the Bank has been reluctant to take action and reduce interest rates, but the RBA has been dropping broad hints that this could change.

AUD/USD for Wednesday, November 27, 2013

AUD/USD November 27 at 14:05 GMT

AUD/USD 0.9080 H: 0.9138 L: 0.9066

AUD/USD Technical

• AUD/USD continues to post losses in Wednesday trading. The pair has dipped below the 0.91 line in the European session.
• The pair is receiving support at the key level of 0.9000. This is followed by a support level at 0.8893.
• AUD/USD is facing resistance at 0.9119. This is a weak line which could see activity during the day. This is followed by a resistance line at 0.9229.
• Current range: 0.9000 to 0.9119

Further levels in both directions:

• Below: 0.9000, 0.8893, 0.8735 and 0.8658
• Above: 0.9119, 0.9200, 0.9305, 0.9400 and 0.9508

OANDA’s Open Positions Ratio

AUD/USD is unchanged in Wednesday trading, continuing the trend we have seen all week. This is not reflected in the current movement of the pair, as the Australian dollar continues to post losses. The ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar reversing directions and moving to higher ground.

The pair has lost ground following strong US employment numbers. We could see the pair continue to trade close to the 0.91 line.

AUD/USD Fundamentals

• 13:30 US Core Durable Goods Orders. Estimate.0.5%. Actual -0.1%.
• 13:30 US Unemployment Claims. Estimate 331K. Actual 316K.
• 13:30 US Durable Goods Orders. Estimate -1.5%. Actual -2.0%
• 14:45 US Chicago PMI. Estimate 60.6 points.
• 14:55 US Revised UoM Consumer Sentiment. Estimate 73.1 points.
• 14:55 US Revised UoM Inflation Expectations.
• 15:00 CB Leading Index. Estimate 0.1%.
• 15:30 US Crude Oil Inventories. Estimate 0.5M.
• 17:00 US Natural Gas Storage. Estimate -11B.

*Key releases are highlighted in bold

*All release times are GMT

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