AUD/USD

The Australian dollar sustained sharp losses in Wednesday trading, despite strong Australian employment numbers. The pair has steadied on Thursday, trading in the mid-0.90 range. It’s a busy schedule over in the US, with three major events – Core Retail Sales, Retail Sales and Unemployment Claims.

Australian employment numbers looked sharp on Thursday. Employment Change surprised the markets with a strong gain of 21.0 thousand, a seven-month high. This easily beat the estimate of 10.3 thousand. The unemployment rate edged higher to 5.8%, matching the forecast. Despite the strong numbers, the Australian dollar posted sharp losses against the US currency.

Over in the US, last week’s employment numbers were excellent, as Unemployment Claims, Non-Farm Payrolls and the Unemployment Rate all impressed. The Fed has said that a stronger employment picture is a prerequisite to QE tapering, and last week’s numbers certainly increase the possibility of the Fed taking action at its December policy meeting. Currently, the Fed is purchasing $85 billion in assets every month, and a Fed taper would likely boost the US dollar against the major currencies.

With memories of the October government shutdown still fresh on Capitol Hill, lawmakers have reached a budget deal which Congress will have to approve. The agreement will remove the risk of a government shutdown and reduce the deficit by a modest $23 billion. Democrats and Republicans both had criticism of the proposal, but there is general agreement in Washington that the compromise reached is a positive step which removes some of the economic uncertainty we’ve seen in recent months. Congress must approve a budget, or the US could face another government shutdown in mid-January.

AUD/USD for Thursday, December 12, 2013

AUD/USD December 12 at 12:30 GMT

AUD/USD 0.9049 H: 0.9082 L: 0.9011

AUD/USD Technical

• AUD/USD is steady in Thursday trading. The pair touched a low of 0.9011 late in the Asian session but has since moved higher.
• The pair continues to receive support at the key level of 0.9000. However, this line has weakened and could face strong pressure during the day. This is followed by support at 0.8893.
• On the upside, 0.9119 is the next line of resistance. This is followed by a resistance line at 0.9229.
• Current range: 0.9000 to 0.9119

Further levels in both directions:

• Below: 0.9000, 0.8893, 0.8735 and 0.8658
• Above: 0.9119, 0.9229, 0.9305, 0.9400 and 0.9508

OANDA’s Open Positions Ratio

AUD/USD ratio is almost unchanged in Thursday trading. This is reflected in the current movement of the pair, as the pair is not showing much movement. The ratio is made up of a substantial majority of long positions, reflecting a trader bias towards the Australian dollar moving higher.

The Australian dollar is trading in the mid-0.90 range on Thursday. With the US releasing key employment and retail numbers later in the day, we could see some volatility from AUD/USD during the North American session.

AUD/USD Fundamentals

• 00:00 Australian MI Inflation Expectations. Actual 2.1%.
• 00:00 Australian Employment Change. Estimate 10.3K. Actual 21.0K.
• 00:00 Australian Unemployment Rate. Estimate 5.8%. Actual 5.8%.
• 13:30 US Core Retail Sales. Exp. 0.2%.
• 13:30 US Retail Sales. Exp. 0.6%.
• 13:30 US Unemployment Claims. Exp. 321K.
• 13:30 US Import Prices. Exp. -0.7%.
• 15:00 US Business Inventories. Exp. 0.4%.
• 15:30 US Natural Gas Storage. Exp. -85B.
• 18:01 US 30-year Bond Auction.

*Key releases are highlighted in bold

*All release times are GMT