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By Kenny Fisher

The Australian dollar continues to slip and has lost about 100 points on the day. Early in the North American session, AUD/USD is trading in the mid-0.93 range. In economic news, Australian releases were a mix. Building Approvals jumped to nine-month high, while Retail Sales was a major disappointment, posting its first decline since August 2012. As well, RBA head Glenn Stevens reiterated that the Australian currency is overvalued. In the US, Nonfarm Payrolls jumped last month, and the Unemployment Rate dropped to its lowest level in almost six years. US Trade Balance improved slightly last month.

In Australia, key data was a mix on Thursday. Building Approvals broke a nasty streak of three consecutive declines and jumped 9.9% in June. However, Retail Sales, the primary gauge of consumer spending, posted a decline of -0.5%, missing the estimate of 0.0%. RBA head Glen Stevens took a swipe at the high-flying Aussie, saying that the currency remains overvalued.

Australian Trade Balance is closely linked to currency demand, as foreigners need to purchase Australian dollars to pay for Australian exports. The indicator posted a deficit of $1.91 billion, surprising the markets, which had expected a small deficit of $0.16 billion. Meanwhile, there were no surprises from the RBA, which held the course, maintaining the benchmark interest rate at 2.50%. The central bank has pegged the rate at this level since last August. The central bank is trying to revive the economy with the low-level rates, with limited success.

In the US, employment data sparkled as Nonfarm Payrolls bounce back with a strong reading, coming in at 288 thousand, crushing the estimate of 214 thousand. Unemployment Claims showed little change, while the Unemployment Rate dipped to 6.1%, its lowest level since September 2008. The currency markets gave a thumbs up to the strong US numbers, with the greenback posting gains against the Aussie and other currencies.

AUD/USD for Thursday, July 3, 2014

AUD/USD July 3 at 13:40 GMT

AUD/USD 0.9336 H: 0.9441 L: 0.9330

AUD/USD Technical

S3 S2 S1 R1 R2 R3
0.9000 0.9119 0.9229 0.9361 0.9446 0.9617

  • AUD/USD edged lower in the Asian session and lost more ground late in European trading. The US dollar remains under pressure in North American trading.
  • 0.9229 is providing strong support.
  • 0.9361 is an immediate resistance line. 0.9446 is stronger.

Further levels in both directions:

  • Below: 0.9229, 0.9119, 0.9000 and 0.8891
  • Above: 0.9361, 0.9446, 0.9617 and 0.9757

OANDA's Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions on Thursday, reversing the direction seen a day earlier. This is not consistent with the movement of the pair, as the Australian dollar has posted sharp losses. The ratio is evenly split between long and short positions, indicative of a lack of trader bias with regard to the next move by the pair.

AUD/USD Fundamentals

  • 1:30 Australian Building Approvals. Estimate 3.1%. Actual 9.9%.
  • 1:30 Australian Retail Sales. Estimate 0.0%. Actual -0.5%.
  • 12:30 US Nonfarm Employment Change. Estimate 214K. Actual 288K.
  • 12:30 US Unemployment Claims. Estimate 314K. Actual 315K.
  • 12:30 US Unemployment Rate. Estimate 6.3%. Actual 6.1%.
  • 12:30 US Trade Balance. Estimate -45.1B. Actual -44.4B.
  • 12:30 US Average Hourly Earnings. Estimate 0.2%. Actual 0.2%.
  • 13:45 US Final Services PMI. Estimate 61.1 points. Actual 61.0 points.
  • 14:00 US ISM Non-Manufacturing PMI. Estimate 56.2 points.
  • 14:30 US Natural Gas Storage. Estimate 100B.

*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.

Source: AUD/USD: Aussie Slides On Mixed Numbers, Strong U.S. Payrolls