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AUD/USD: Aussie Steady, U.S. JOLTS Jobs Report Next

AUD/USD: Aussie Steady, U.S. JOLTS Jobs Report Next

The Australian dollar is steady on Tuesday, as AUD/USD trades just below the 0.70 level in the European session. On the release front, the major event of the day is US JOLTS Jobs Openings. The markets are expecting the indicator to improve to 5.41 million. There are no Australian releases on the schedule.

The New Year started in disastrous fashion for the Australian dollar, which plunged some 340 points against its US counterpart. The Aussie recorded daily losses every day last week, as the currency dropped to lows not seen since late September. The Aussie has been steamrolled early in 2016 as nervous investors have dumped minor currencies like the Australian dollar in favor of the safe-haven US dollar. The Australian dollar has been flirting with the 70 line, and could break below this psychologically important level if the current trend continues. The next test for the struggling Aussie comes on Wednesday, with the release of Australian Employment Change, a key event which often has a strong impact on the direction of AUD/USD. The markets are braced for a weak reading of -11 thousand.

The US economy has entered 2016 in excellent shape, and much of the credit goes to the robust US labor market. December employment numbers have looked sharp, as Nonfarm Employment Change surged to 292 thousand, crushing the estimate of 203 thousand. This was the strongest reading in 10 months. The unemployment rate remained unchanged at 5.0%, within the Federal Reserve’s definition of “full employment”. One area of concern in the employment picture is that of wage growth, which has not kept up with the strong improvement in payrolls. Even if technically the US is at “full employment”, there still remains slack in the labor market, meaning that employers aren’t feeling the need to raise wages. This was underscored by the Average Hourly Earnings in December, which posted a flat reading of 0.0%, short of the forecast of 0.2%. This key event is a leading indicator of consumer inflation, meaning that wages must increase before consumers will spend more, thus leading to more inflation. The minutes from the Federal Reserve’s last policy meeting indicated that inflation remains a key concern of policymakers, and inflation levels will play an important role in the timing and size of upcoming rate hikes in 2016.

AUD/USD Fundamentals

Tuesday (Jan. 12)

  • 5:30 US FOMC Member Stanley Fischer Speaks
  • 6:00 US NFIB Small Business Index. Estimate 95.4 points
  • 10:00 US JOLTS Job Openings. Estimate 5.41M
  • 10:00 US IBD/TIPP Economic Optimism. Estimate 47.6 points
  • 9:00 US President Barack Obama Speaks

Wednesday (Jan. 13)

  • 19:30 Australian Employment Change. Estimate -11.0K
  • 19:30 Australian Unemployment Rate. Estimate 5.9%

*Key releases are highlighted in bold

*All release times are EST

AUD/USD for Tuesday, January 12, 2016

AUD/USD Chart

AUD/USD January 12 at 11:25 GMT

AUD/USD Open: 0.6987 Low: 0.6940 High: 0.7005 Close: 0.6988

AUD/USD Technical

S3S2S1R1R2R30.67540.68480.69310.70630.71000.7213
  • AUD/USD posted losses in the Asian session but has recovered in European trade
  • There is resistance at 0.7063
  • 0.6931 is providing support
  • Current range: 0.6931 to 0.7063

Further levels in both directions:

  • Below: 0.6931, 0.6848 and 0.6754
  • Above: 0.7063, 0.7100, 0.7213 and 0.7349

OANDA’s Open Positions Ratio

AUD/USD ratio is unchanged, indicative of a lack of significant movement from the pair. Long positions command a majority of positions (61%), indicative of trader bias towards the pair moving higher.

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