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By Kenny Fisher

AUD/USD is unchanged in thin holiday trading, as the pair trades in the mid-0.93 range on Friday’s European session. The Australian markets are closed, and there are no Australian or US releases.

In the US, Unemployment Claims rebounded sharply, as the key indicator dropped to 300 thousand last week. This beat the estimate of 314 thousand and marked the lowest reading since May 2007. With the Federal Reserve looking to trim its QE program and speculation rising about a possible interest rate increase, every employment release is under the market microscope. There was more good news from the manufacturing sector, as the Philly Fed Manufacturing Index soared to 16.6 points, its best showing since September. This was well above the estimate of 9.6 points.

Australian releases failed to impress on Thursday. NAB Quarterly Business Confidence dropped to 6 points in Q1, down from 8 points in Q4. New Motor Vehicle Sales, an important consumer spending indicator, declined by 0.3%, its second drop in three releases. Despite the weak numbers, the Aussie is holding its own as it remains at high levels against the US dollar.

Comments by Federal Reserve chair Janet Yellen on Wednesday continue to weigh on the US dollar. Yellen said there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.

The crisis in the Ukraine continues to simmer, as Russian President Vladimir Putin threatened to act his “right” to attack Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart met on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we can expect the markets to react if the crisis intensifies.

AUD/USD for Friday, April 18, 2014

Forex Rate Graph 21/1/13

AUD/USD April 18 at 12:10 GMT

AUD/USD 0.9332 H: 0.9338 L: 0.9324

AUD/USD Technical

  • AUD/USD is listless on Friday, as the pair has steadied following losses a day earlier.
  • 0.9229 is providing strong support.
  • 0.9361 is a weak resistance line. This is followed by stronger resistance at 0.9446.
  • Current range: 0.9229 to 0.9361.

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000 and 0.8893
  • Above: 0.9361, 0.9446, 0.9542, 0.9617 and 0.9703

OANDA’s Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Friday. This is consistent with the pair’s movement, as the Aussie has posted very slight gains. The ratio remains close to an even split, pointing to a lack of bias as to which direction AUD/USD might take next.

AUD/USD is showing little activity on Friday. With trading muted due to the holiday, we can expect more of the same from the pair.

AUD/USD Fundamentals

  • There are no Australian or US releases on Friday.