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By Kenny Fisher

AUD/USD is stable on Friday, after losing close to one cent a day earlier. In the European session, AUD/USD is trading in the mid-0.93 range. The Aussie had a rough day after weak Australian retail sales data, as well as sharp US employment figures. US markets are closed for the Fourth of July holiday, so traders can expect thin trade during the day. Today's sole release is a speech from RBA Assistant Governor Malcolm Edey at a conference in Melbourne.

US employment numbers were the perfect prelude to a long holiday weekend in the US, as Nonfarm Payrolls and the Unemployment Rate sparkled. Nonfarm Payrolls, one of the most important indicators, bounced back in June with a strong gain of 288 thousand new jobs. This crushed the estimate of 214 thousand. Unemployment Claims was steady at 315 thousand, almost replicating the estimate of 314 thousand. There was more good news from the Unemployment Rate, which continues to move downward. The indicator dipped to 6.1%, its lowest level since September 2008. The strong employment numbers are sure to increase speculation about an interest rate hike by the Federal Reserve, and after the Fourth of July holiday, the markets will be closely attuned to remarks from Federal Reserve policymakers.

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. The RBA has repeatedly tried to talk down the Aussie, but this hasn't worked, as the Australian dollar continues to trade at high levels, and there has even been talk of the currency reaching parity with the US dollar.

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 low-level rates, with limited success.

AUD/USD for Friday, July 4, 2014

AUD/USD July 4 at 9:40 GMT

AUD/USD 0.9354 H: 0.9468 L: 0.9344

AUD/USD Technical

S3S2S1R1R2R3
0.90000.91190.92290.93610.94460.9617
  • AUD/USD is marked my limited movement on Friday. The pair edged higher in the Asian session and retracted in the European trading.
  • 0.9229 is providing support. 0.9119 is stronger.
  • 0.9361 remains 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 almost unchanged on Friday. This is consistent with the movement of the pair, which is showing little activity. The ratio is almost 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

  • 3:40 RBA Assistant Governor Malcolm Edey Speaks.

*Key releases are highlighted in bold

*All release times are GMT

Source: AUD/USD: Aussie Settles Down After Steep Slide