AUD/USD – Aussie Flat on Mixed US Data

AUD/USD is steady on Thursday, as the pair trades just above the 0.78 line. On the release front, US unemployment claims looked excellent, dropping sharply to 283 thousand. However, the Philly Fed Manufacturing Index had a poor outing in February, dropping to 5.2 points. There are no Australian releases on Thursday.

On Thursday, key US indicators were mixed. Unemployment Claims rebounded strongly with a sharp drop of 283 thousand, compared to 304 thousand a week earlier. This easily beat the estimate of 293 thousand. The news was not as good from the Philly Fed Manufacturing Index, which slipped to 5.2 points, down from 5.3 points and a third straight drop. The markets had expected a reading of 8.8 points.

On Wednesday, the Federal Reserve released the minutes of its previous policy meeting. The minutes were decidedly dovish in nature, as Fed policymakers raised concerns that a mid-year rate hike could hurt the economic recovery. The Fed also said it was worried about the impact of global events on the US economy, such as the slowdown in China and the Greek financial crisis. With US inflation at low levels, the Fed is not in any rush to raise rates, so speculation of a mid-year rate may have been premature.

The release of the RBA minutes on Tuesday pointed to continuing weakness in the Australian economy. The minutes stated that the RBA expects economic growth to remain weak and unemployment to rise. However, bank policymakers discussed whether to delay last week’s surprise rate cut, which lessens the likelihood of another drop in March. Last week, RBA Governor Glenn Stevens said that economic growth remains lower than the RBA would like and that lowering interest rates may not be enough to spur growth. If the RBA is indeed hinting that no rate cuts are planned for the near future, the Aussie could recover some recent losses to its US counterpart.

AUD/USD for Thursday, February 19, 2015

AUD/USD February 19 at 15:15 GMT

AUD/USD 0.7783 H: 0.7813 L: 0.7757

AUD/USD Technical

• AUD/USD was marked by choppy trading in the Asian and European sessions. AUD/USD is unchanged early in North American session.
• 0.7904 has strengthened in resistance.
• 0.7799 continues to see action and is currently a weak support line. 0.7684 is stronger.
• Current range: 0.7799 to 0.7904

Further levels in both directions:

• Below: 0.7799, 0.7684, 0.7582, 0.7403 and 0.7265
• Above: 0.7904, 0.8081, 0.8150 and 0.8214

OANDA’s Open Positions Ratio

AUD/USD ratio is almost unchanged on Thursday, continuing the lack of movement which has marked the ratio throughout the week. This is consistent with the pair’s lack of movement. The ratio has a majority of long positions, indicative of trader bias towards the Australian dollar moving higher.

AUD/USD Fundamentals

• 13:30 US Unemployment Claims. Estimate 293K. Actual 283 thousand.
• 15:00 US Philly Fed Manufacturing Index. Estimate 8.8 points. Actual 5.2 points.
• 15:00 US CB Leading Index. Estimate 0.4%. Actual 0.2%.
• 15:30 US Natural Gas Storage. Estimate -110B. Actual -111B.
• 16:00 US Crude Oil Inventories. Estimate -1.8M.

*Key releases are highlighted in bold

*All release times are GMT

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.