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By Kenny Fisher

The Australian dollar has picked up this week right where it left off, continuing to lose ground against the US dollar. In Monday's North American session, AUD/USD is trading in the mid-93 range, its lowest levels since early October. On Friday, US Non-Farm Payrolls surged, pushing the pair higher. However, US Preliminary U0M Consumer Sentiment was a disappointment, slipping to an eight-month low. Monday's sole release was Australian Home Loans, which jumped 4.4%, a six-month high. There are no US releases on Monday, as US markets are closed for a holiday.

The Aussie continues to weaken badly and has lost about 160 points since Thursday against the US dollar. The Australian dollar failed to take advantage of Home Loans, which rebounded from a sharp loss of 3.9% in September, jumping 4.4% last month. This easily beat the estimate of 3.6% and was the sharpest gain the indicator has posted since April. The strong figure points to increased activity in the housing market as well as stronger consumer spending, a critical component of economic growth.

The Australian labor market continues to struggle to create new jobs. Employment Change, one of the most important employment indicators, posted a weak gain of 1.1 thousand in October, a sharp drop from September, which saw a gain of 9.1 thousand. The markets had expected a much stronger gain, with an estimate of 10.3 thousand. This marks the fourth straight release which has been well short of the estimate, pointing to trouble in the employment market. The Unemployment Rate edged up from 5.6% to 5.7%, matching the forecast.

Over in the US, the markets had very low expectations from non-farm payrolls, one of the most important economic indicators. The estimate for the October release stood at just 121,000, as there was concern that the reading would be artificially low due to the government shutdown in October. However, the indicator put those concerns to rest as the indicator soared to 204,000, its highest level in eight months. The outstanding NFP figure bolstered the US dollar against the major currencies, and has increased speculation that the Fed might press the tapering trigger in December. Such talk could bolster the US currency, as a reduction in QE is bullish for the dollar. At the same time, speculation about a scaling down in QE introduces some uncertainty and volatility in the currency markets.

AUD/USD for Monday, November 11, 2013.

Forex Rate Graph 21/1/13

AUD/USD November11 at 14:50 GMT

AUD/USD 0.9358 H: 0.9390 L: 0.9348

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9119 0.9229 0.9305 0.9400 0.9508 0.9613
  • AUD/USD continues to lose ground in Monday trading. The pair was steady in the Asian session and edged lower in European trading.
  • On the upside, the round number of 0.9400 has reverted to a resistance role. This is not a strong line and could face pressure if the Australian dollar can reverse its current downward direction. There is stronger resistance at 0.9508.
  • AUD/USD pair is receiving support at 0.9305, which is protecting the 0.93 level. This is followed by support at 0.9229, which has remained intact since mid-September.
  • Current range: 0.9305 to 0.9400

Further levels in both directions:

  • Below: 0.9305, 0.9229, 0.9119 and 0.9000
  • Above: 0.9400, 0.9508, 0.9613 and 0.9700

OANDA's Open Positions Ratio

AUD/USD ratio is almost unchanged in Monday trading. This is reflected in the current movement of the pair, which has shown only slight movement as the Australian dollar has edged lower. The ratio is made up of a majority of open long positions, reflecting a trader bias towards the Australian dollar moving to higher ground.

AUD/USD continues to point downward as the Aussie's troubles continue. We can expect movement from the pair during the North American session to be limited in nature.

Source: Australian Dollar: Slide Continues Despite Excellent Housing Data