AUD/USD in focus ahead of Aussie jobs, Chinese industrial production and US CPI data
Fawad Razaqzada September 13, 2017 1:02 PM
Key data from Australia and China will be released in the early hours of Thursday, followed by inflation figures from the US later on in Thursday’s session. Thursday’s data releases could have a big impact on the Aussie dollar, especially the AUD/USD pair.
From Australia we will have the latest monthly jobs report. Last month saw seasonally-adjusted employment increase by 27,900 in July. The increase looked impressive but the detail of the jobs report revealed that the rise was actually due entirely to a sharp increase (48,200) in part-time jobs. In fact, full-time employment decreased by 20,300, no less. So, the first thing we want to see is a rise in full-time employment for the month of August, otherwise the Australian dollar could be in trouble. A good headline figure above the expected 17,500 could send the Aussie sharply higher. The unemployment rate is expected to have remained unchanged at 5.6 per cent.
Meanwhile from China, industrial production will be among the main data releases there. Industrial output slowed down unexpectedly sharply last month from 7.6% to 6.4% year-on-year. But in August, it is expected to have rebounded to 6.6%. Anything less than this could spook investors about the health of the world’s second largest economy. Now China is Australia’s largest trading partner. So what happens in China is important for Australia as, for example, a downturn could hit the latter’s exports.
Thursday will also see the release of US CPI, which makes it a very important session for the AUD/USD, given abovementioned data releases from Australia and China. US CPI is seen rising 0.3% month-over-month with the year-over-year figure expected to climb to 1.8% from 1.7% previously. If US inflation turns out to be hotter than anticipated then one would expect the dollar to rise as the probability of another Federal Reserve interest rate rise increases. Conversely, a disappointing figure could halt the current dollar rebound as that may put an end to expectations of another rate increase this year.
Ahead of the abovementioned data, the AUD/USD has created what looks like a potential reversal formation, although at this stage none of the key support levels have broken down yet to suggest the top is in. As can be seen from the chart, since the formation of the inverted hammer candle and the subsequent failure of price to hold above the previous 2017 high of 0.8060/5, the AUD/USD has been largely out of favour. It has pulled back to within its existing range ahead of the key data releases. But so far, price has managed to hold above the point of origin of the breakout around the 0.78210/30 area. Only when the Aussie breaks below here, will the uptrend technically be over as we would then have our first lower low in place. So, for now, any pullback will have to be viewed as just that – a pullback in what still is a bullish trend. Indeed, any move back above the 0.8040-0.8065 area would re-confirm the bullish trend.
Source: eSignal and FOREX.com
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.