AUD/USD - Aussie Gains As NFP Misses Estimate

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 |  Includes: FXA, UDN, UUP
by: Dean Popplewell

By Kenny Fisher

AUD/USD is showing its best gains of the week, as the pair trades close to the 0.93 line in Friday's European session. On the release front, Nonfarm Payrolls improved in March but fell short of the estimate. The US unemployment rate remained unchanged in March. There are no Australian releases on Friday.

In the US, Non-Farm Payrolls rose to 192 thousand last month, up from 175 thousand a month earlier. However, the reading fell below expectations, as the estimate stood at 199 thousand. Unemployment Claims disappointed on Thursday, as the key indicator jumped to 326 thousand last week, up from 311 thousand in the previous release. This missed the estimate of 319 thousand. Earlier in the week, ADP Nonfarm Payrolls jumped to 191 thousand, up from 139 thousand a month earlier. This practically matched the estimate of 192 thousand.

Earlier in the week, Fed chair Janet Yellen surprised the markets with unexpectedly dovish comments about the economy. Yellen noted that inflation and employment levels need to improve considerably, and the Federal Reserve would continue to provide monetary stimulus for some time. Currently, the Fed is purchasing $55 billion in assets under its QE scheme. There have been three tapers to QE so far, and Yellen plans to wind up the program in the fall, provided that the US economy does not run into any serious turbulence. At the same time, the Federal Reserve has stated that it has no plans to raise interest rates until sometime in 2015.

In Australia, Retail Sales posted a weak gain of 0.2%, short of the estimate of 0.4%. It was the indicator's weakest performance since August. Retail Sales is the primary gauge of consumer spending, which plays a key role in economic growth. Meanwhile, the RBA maintained the benchmark interest rate at 2.50%, where it has been pegged since last August. RBA Governor Glenn Stevens took a swipe at the Aussie, saying that the high value of the currency in the past few months was not good for economic growth. After the rate decision, the Australian dollar briefly pushed above the 0.93 line, its highest level in four months. Last week, Stevens said that interest rates are unlikely to rise in 2014, as the RBA tries to boost consumer spending and residential construction.

AUD/USD for Friday, April 4, 2014

Forex Rate Graph 21/1/13

AUD/USD April 4 at 14:50 GMT

AUD/USD 0.9284 H: 0.9290 L: 0.9230

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9000 0.9119 0.9229 0.9361 0.9446 0.9542
Click to enlarge
  • AUD/USD has posted gains on Friday. The pair is within striking distance of the 0.93 line.
  • 0.9229 has strengthened in support as the Aussie trades at higher levels.
  • 0.9361 is the next resistance line.
  • Current range: 0.9229 to 0.9361

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000, 0.8893 and 0.8735
  • Above: 0.9361, 0.9466, 0.9542 and 0.9617

OANDA's Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions in Friday trading. This is consistent with what we are seeing from the pair, as the Australian dollar has recorded gains. AUD/USD ratio is evenly split between long and short positions, indicative of a lack of trader bias towards what direction AUD/USD will take.

The Australian dollar is on the move, trading close to the 0.93 line. The US dollar remains under pressure early in the North American session.

AUD/USD Fundamentals

  • 12:30 US Non-Farm Employment Change. Estimate 199K.
  • 12:30 US Unemployment Rate. Estimate 6.6%.
  • 12:30 US Average Hourly Earnings. Estimate 0.2%.

*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.