AUD/USD – Aussie Under Pressure, US Durables Slide

The Australian dollar has posted slight losses on Thursday, as AUD/USD trades just above the 0.75 line in the North American session. In the US, Unemployment Claims came in at 267 thousand, within expectations. However, durable goods reports pointed to declines, disappointing the markets. There are no Australian releases on Thursday, as it’s a bank holiday.  On Friday, the US releases Final GDP, with the estimate standing at 1.0%

Last week’s Federal Reserve policy statement appeared to pour cold water on any imminent rate hikes, but recent hawkish statements by Federal Reserve officials have surprised the markets and sent the Aussie sharply lower on Wednesday. Earlier in the week, John Williams, president of the San Francisco Fed, said that the Fed could raise rates in April and June, if economic conditions improve. Although the dot plot (an FOMC projection of rate hikes) was lowered at the March meeting, he insisted that the Fed had not changed its path of rate hikes. His comments were echoed by Atlanta Fed Dennis Lockhart, who also said that an April rate move was a clear possibility. Lockhart noted that the US economy was holding up well, despite weak global conditions. Lockart said that the economy was close to full employment and the Fed’s target of 2 percent inflation was attainable. There was further support for rate hikes from two other Fed presidents, Patrick Harker and James Bullard. Harker said that given the strong economy, the Fed should consider raising interest rates as early as the April meeting, and added that he favored at least three rate hikes during the year. On Wednesday, Bullard said that with the US unemployment rate at very low levels, the Fed could be forced to raise rates sooner rather than later. Given these statements, traders should treat an April move by the Fed as a reasonable possibility, with US employment and inflation numbers having a huge say on the Fed’s decision.

AUD/USD Fundamentals

Thursday (March 24)

• 8:15 US FOMC Member James Bullard Speaks
• 8:30 US Core Durable Goods Orders. Estimate -0.2%. Actual -1.0%
• 8:30 US Unemployment Claims. Estimate 267K. Actual 265K
• 8:30 US Durable Goods Orders. Estimate -3.0%. Actual -2.8%
• 9:45 US Flash Services PMI. Estimate 51.3. Actual 51.0
• 10:30 US Natural Gas Storage. Estimate 20B. Actual 15B

Upcoming Key Events

Friday (March 25)

• 12:30 US Final GDP. Estimate 1.0%

*Key releases are highlighted in bold

*All release times are DST

AUD/USD for Thursday, March 25, 2016

AUD/USD March 25 at 10:25 DST

AUD/USD  Open: 0.7533 Low: 0.7477 High: 0.7534 Close: 0.7515

AUD/USD Technical

• AUD/USD posted losses in the Asian session. The pair has reversed directions and recovered some of these losses in European trade. AUD/USD is level in the North American session.
• 0.7472 is weak support line
• 0.7560 has switched to resistance following sharp losses by AUD/USD on Wednesday
• Current range: 0.7472 to 0.7560

Further levels in both directions:

• Below: 0.7472, 0.7385 and 0.7213
• Above: 0.7560, 0.7678, 0.7796 and 0.7913

OANDA’s Open Positions Ratio

The AUD/USD ratio is unchanged. Short positions have a majority (54%), indicative of trader bias towards AUD/USD continuing to lose 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.