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Aussie Loses Ground On US Unemployment Claims

By (Kenny Fisher) |  Forex  |  Jul 10, 2014 04:05PM GMT  |   Add a Comment
 
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AUD/USD is lower on Thursday, as the pair has dropped below the 0.94 line. On the release front, Australian Employment Change surprised the markets, climbing to a three-month high. However, Unemployment Rate increased in June. As well, MI Inflation Expectations continues to head lower. In the US, Unemployment Claims dropped to their lowest level in six weeks.

Australian employment data was a mix on Thursday. Employment Change rebounded in May with a strong gain of 15.9 thousand, easily beating the estimate of 12.3 thousand. At the same time, Unemployment Rate rose to 6.0%, the highest level seen since February. This edged above the estimate of 5.9%. Earlier in the week, Consumer Sentiment jumped 1.9% in June, its highest level since last October. Analysts closely follow this indicator, since increased consumer confidence usually translates into stronger consumer spending, which is a critical component of economic growth. This release follows strong numbers from NAB Business Confidence and ANZ Job Advertisements, which both improved in June.

In the US, Unemployment Claims dropped, as employment data continues to impress. The key indicator dropped to 304 thousand, well below the estimate of 316 thousand. Employment numbers for June have looked sharp, led by a jump in Nonfarm Payrolls and a drop in the unemployment rate.  The strong employment numbers have increased speculation about an interest rate hike by the Federal Reserve, and remarks by Fed policymakers will be under the market microscope.

The Federal Reserve minutes did not shed much light on when the Fed plans to raise interest rates, but policymakers did agree to wind up the QE scheme by October. The asset purchase program flooded the economy with over $2 trillion, and the Fed has been steadily reducing the program since last December. Winding down QE will require several more tapers by the Fed, but that shouldn't pose a problem, given the solid employment data the economy has been churning out.

 AUD/USD for Thursday, July 10, 2014

AUD/USD
AUD/USD

AUD/USD July 10 at 15:05 GMT

  • AUD/USD 0.9362 H: 0.9456 L: 0.9384

AUD/USD Technicals

S3 S2 S1 R1 R2 R3
0.9119 0.9229 0.9361 0.9446 0.9617 0.9757
  •  AUD/USD weakened and dropped below the 0.94 line late in the Asian session. After an uneventful European session, the pair has edged higher in North American trading.
  • On the downside, the pair is testing support at 0.9361 as the Aussie has lost ground. There is stronger support at 0.9229.
  • 0.9446 is the next resistance line. This is followed by resistance at 0.9617.

Further levels in both directions:

  • Below: 0.9361, 0.9229, 0.9119 and 0.9000
  • Above: 0.9446, 0.9617, 0.9757 and 0.9842

OANDA's Open Positions Ratio

AUD/USD ratio is pointing to gains in long positions in Thursday, reversing the trend from a day earlier. This is not consistent with the movement of the pair, as the Australian dollar has posted losses. The ratio is almost evenly split between long and short positions, indicative of a lack of trader bias towards where the Australian dollar is headed.

AUD/USD Fundamentals

  • 1:00 Australian MI Inflation Expectations. Actual 3.8%.
  • 1:30 Australian Employment Change. Estimate 12.3K. Actual 15.9K.
  • 1:30 Australian Unemployment Rate. Estimate 5.9%. Actual 6.0%.
  • 12:30 US Unemployment Claims. Estimate 316K. Actual 304K.
  • 14:00 US Wholesale Inventories. Estimate 0.6%. Actual 0.5%.
  • 14:30 US Natural Gas Storage. Estimate 92B. Actual 93B.
  • 17:01 US 30-year Bond Auction.
  • 20:30 US FOMC Member Stanley Fischer Speaks.

*Key releases are highlighted in bold.

*All release times are GMT

Original Post

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