AUD/USD – Aussie Slide Continues on Weak Job Data

The Australian dollar continues to lose ground on Friday, as AUD/USD trades slightly above the 0.87 line in the European session. The Aussie had looked sharp earlier in the week, but has surrendered most of those gains. On the release front, Australian Employment Change was down sharply, contracting by -29.7 thousand. On Friday, Home Loans posted a decline of 0.9%. In the US, there are no major releases on the calendar.

The Aussie continues to display strong movement this week. After climbing about 150 points earlier in the week, the currency has coughed up most of those gains, trading close to the 0.87 line. AUD/USD lost ground following dismal job numbers on Thursday, Employment Change, which had jumped some 120 thousand in July, posted a sharp decline of 29.7 thousand in the September reading. The markets had anticipated a gain of 17.6 thousand. The unemployment rate remained unchanged at 6.1%, matching the estimate.

The RBA has continually complained about the high value of the Australian dollar, saying that it was impeding economic growth. After the Aussie sank in September, in which it lost some 500 points, one might have thought that the RBA would cut the currency some slack in Tuesday’s rate statement. However, the RBA did not change its tune, stating that although the Aussie has lost ground to the US, it remained high by historical standards and continues to weigh on the economy.

US Unemployment Claims were unchanged, coming in at 287 thousand for a second straight week. This beat the estimate of 291 thousand. The indicator has now exceeded the forecast for four straight readings. Earlier in the week, JOLTS Job Openings climbed to 4.84 million, up from 4.67 million a month earlier. These numbers follow last week’s excellent Nonfarm Payrolls, pointing to a stronger job market in the US. With QE slated to end later this month, the focus will shift to the timetable for an interest rake hike, which could take place in the first half of 2015.

Earlier in the week, the FOMC minutes of the last policy meeting were unexpectedly dovish. In the minutes, the Fed poured some cold water on rising expectations of a rate hike, as a number of policymakers said that the Federal Reserve should take a more data-dependent approach regarding a rate hike. The Fed also voiced concern about the rising strength of the US dollar which could weigh on the recovery. These factors could well support keeping the current accommodative policy in place.

AUD/USD for Friday, October 10, 2014

AUD/USD October 10 at 11:55 GMT

AUD/USD 0.8712 H: 0.8785 L: 0.8706

AUD/USD Technical

S3	S2	S1	R1	R2	R3
0.8456	0.8550	0.8668	0.8763	0.8820	0.8953

• AUD/USD posted sharp losses in the Asian session, breaking below resistance at 0.8763. The pair has edged lower in the European session.


• On the upside, 0.8763 has reverted to a resistance role as the pair trades at lower levels. 0.8820 is stronger.


• 0.8668 is an immediate support line. 0.8550 is next.


• Current range: 0.8668 to 0.8763

Further levels in both directions:

• Below: 0.8668, 0.8550, 0.8456 and 0.8315


• Above: 0.8763, 0.8820, 0.8953, 0.9020 and 0.9119

OANDA’s Open Positions Ratio

AUD/USD ratio has a majority of long positions, indicative of trader bias towards AUD/USD reversing directions and moving higher.

AUD/USD Fundamentals

• 00:30 Australian Home Loans. Estimate +0.2%. Actual -0.9%.


• 00:45 RBA Assistant Governor Malcolm Edey Speaks.


• 12:30 US Import Prices. Estimate -0.5%.


• 13:00 US FOMC Member Charles Plosser Speaks.


• 18:00 US Federal Budget Balance.


• 19:30 US FOMC Member Richard Fisher Speaks.

* 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.

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Gold Remains Weak, Pressing on Support at $1200

Gold prices are showing little change on Wednesday, as the metal remains under pressure from the strong US dollar. In the European session, the spot price stands at $ 1208.93 per ounce. There are two key releases on the calendar – ADP Non-Farm Employment Change and ISM Manufacturing PMI. The markets are not expecting significant changes from last month’s readings.

Recent sharp gains by the US dollar are weighing on gold prices, as a stronger dollar diminishes the metal’s appeal as an alternative asset to the dollar. The dollar has enjoyed a spectacular September, and gold prices have tumbled over 6% during this period. With the Fed scheduled to wind up QE and attention shifting to the timing of an interest rate hike, gold could continue to move lower.

The markets are keeping a close eye upcoming US employment numbers, starting with ADP Nonfarm Payrolls later on Wednesday. The estimate stands at 207 thousand, little changed from 204 thousand. The ADP release precedes the official NFP release which will be published on Friday. The markets are anticipating a sharp gain, with an estimate of 216 thousand. If the indicator does follow suit with better numbers this month, the US dollar could post further gains against its major rivals.

US Pending Home Sales posted a decline of 1.0%, compared to last month’s gain of 3.3%. The important housing indicator has shown strong movement, resulting in readings that have been well off market estimates. US housing indicators continue to paint a mixed picture, as New Home Sales jumped last month, while Existing Home Sales softened and was well short of expectations.

XAU/USD for Wednesday, October 1, 2014

XAU/USD October 1 at 10:45 GMT

XAU/USD 1209.18 H: 1209.94 L: 1204.66

XAU/USD Technical

S3	S2	S1	R1	R2	R3
1136	1156	1186	1215	1240	1252

• XAU/USD has been uneventful in the European and Asian sessions.


• 11186 remains an immediate support level. 1156 is next.


• 1215 is providing weak resistance. 1240 is stronger.


• Current range: 1186 to 1215.

Further levels in both directions:

• Below: 1186, 1156, 1136 and 1101


• Above: 1215, 1240, 1252, 1275 and 1300

OANDA’s Open Positions Ratio

XAU/USD ratio is pointing to gains in short positions in Wednesday trade. This is not consistent with the pair’s movement, as gold is showing little movement. Trader sentiment is strongly in favor of long positions, which make up most of the positions in the ratio.

XAU/USD Fundamentals

• 12:15 US ADP Nonfarm Employment Change. Estimate 207K.


• 13:45 US Final Manufacturing PMI. Estimate 58.0 points.


• 14:00 US ISM Manufacturing PMI. Estimate 58.6 points.


• 14:00 US Construction Spending. Estimate 0.5%.


• 14:00 US ISM Manufacturing Prices. Estimate 56.8 points.


• 14:30 US Crude Oil Inventories. Estimate 0.6M.


• All Day – US Total Vehicle Sales. Estimate 16.9M.

*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.

MarketPulse

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