Australian retail sales decreased more than expected in December but rose more than anticipated in the fourth quarter. The trade surplus decreased, as imports rose at the same time exports slowed down. The AUDUSD recovered from its low and moved out of its horizontal support area. How will this currency pair be impacted by US data regarding its labor market? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
Following yesterday’s strong ADP report, forex traders will look forward to more data concerning the state of the US labor market. Today’s data does not affect tomorrow’s NFP report, which is eagerly awaited. The previous employment report surprised to the upside but failed to provide a boost to the US Dollar. Will bulls add to the breakout in the AUDUSD, or will bears force a reversal? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian NAB Business Confidence: Australian NAB Business Confidence for the fourth-quarter was reported at -1. Forex traders can compare this to Australian NAB Business Confidence for the third quarter, which was reported at -1.
- Australian Trade Balance: The Australian Trade Balance for December was reported at A$5,223M. Economists predicted a figure of A$5,600M. Forex traders can compare this to the Australian Trade Balance for November, which was reported at A$5,800M.
- Australian Retail Sales: Australian Retail Sales for December decreased by 0.5% monthly. Economists predicted a decrease of 0.2% monthly. Forex traders can compare this to Australian Retail Sales for November, which increased by 1.0% monthly. Australian Retail Sales excluding Inflation for the fourth-quarter increased by 0.5% quarterly. Economists predicted an increase of 0.3% quarterly. Forex traders can compare this to Australian Retail Sales excluding Inflation for the third-quarter, which decreased by 0.1% quarterly.
Here are the key factors to keep in mind today for US Dollar trades:
- US Initial Jobless Claims and Continuing Claims: US Initial Jobless Claims for the week of February 1st are predicted at 215K and US Continuing Claims for the week of January 25th are predicted at 1,720K. Forex traders can compare this to US Initial Jobless Claims for the week of January 25th, which were reported at 216K and to US Continuing Claims for the week of January 18th, which were reported at 1,703K.
- US Non-Farm Productivity and Unit Labor Costs: Preliminary US Non-Farm Productivity for the fourth-quarter is predicted to increase by 1.5% quarterly, and Unit Labor Costs are predicted to increase by 1.0% quarterly. Forex traders can compare this to US Non-Farm Productivity for the third quarter, which decreased by 0.2% quarterly, and to Unit Labor Costs, which increased by 2.5% quarterly.
Should price action for the AUDUSD remain inside the or breakout above the 0.6720 to 0.6770 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.6750
- Take Profit Zone: 0.6990 – 0.7030
- Stop Loss Level: 0.6700
Should price action for the AUDUSD breakdown below 0.6720 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.6670
- Take Profit Zone: 0.6555 – 0.6610
- Stop Loss Level: 0.6720
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