Australian home loans came in better-than-expected in November, but still below October’s reading. Investment lending rose at a healthy clip, adding to bullish momentum in the Australian Dollar. As markets digest the US-China trade deal, which is already showing signs of weakness, the AUDUSD maintained its bullish chart pattern. What impact will US economic data have on price action today? Today’s fundamental analysis will take a look at price action in both directions.
Forex traders will look forward to today’s initial jobless claims, which have moved higher over the past few weeks. Last week’s NFP disappointment is adding to concerns over the health of the labor market. Retail sales will also be in focus. Economists predict a small increase in December. The AUDUSD is in a holding pattern inside of its horizontal support area. How will price action react following the release of data? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian Home Loans and Investment Lending: Australian Home Loans for November increased by 1.8% monthly. Economists predicted an increase of 1.4% monthly. Forex traders can compare this to Australian Home Loans for October, which increased by 2.1% monthly. Australian Investment Lending for November increased by 2.2% monthly, and the Owner-Occupier Loan Value increased by 1.6% monthly. Economists predicted an increase of 1.0% and 1.8%. Forex traders can compare this to Australian Investment Lending for October, which increased by 1.5% monthly and to Owner-Occupier Loan Value, which increased by 2.3% monthly.
- RBA FX Transactions: RBA FX Transactions for December were reported at A$1.776M. Forex traders can compare this to RBA FX Transactions for November, which were reported at A$873M. RBA FX Government Transactions for December were reported at -A$2,062M and RBA FX Other Transactions were reported at A$3,403M. Forex traders can compare this to RBA FX Government Transactions for November, which were reported at -A$756M and to RBA FX Other Transactions, which were reported at A$239M.
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 January 11th are predicted at 216K and US Continuing Claims for the week of January 4th are predicted at 1,720K. Forex traders can compare this to US Initial Jobless Claims for the week of January 4th, which were reported at 214K and to US Continuing Claims for the week of December 28th, which were reported at 1,803K.
- US Advanced Retail Sales: US Advanced Retail Sales for December are predicted to increase by 0.3% monthly, and Retail Sales Less Autos are predicted to increase by 0.5% monthly. Forex traders can compare this to US Advanced Retail Sales for November, which increased by 0.2% monthly and to Retail Sales Less Autos, which increased by 0.1% monthly. Retail Sales Less Autos and Gas for December are predicted to increase by 0.4% monthly, and Retail Sales Control Group are predicted to increase by 0.3% monthly. Forex traders can compare this to Retail Sales Less Autos and Gas for November, which were reported flat at 0.0% monthly and to Retail Sales Control Group, which increased by 0.1% monthly.
- US Philadelphia Fed Business Outlook: The Philadelphia Fed Business Outlook for January is predicted at 3.6. Forex traders can compare this to the Philadelphia Fed Business Outlook for December, which was reported at 0.3.
- US Import and Export Price Index: The US Import Price Index for December is predicted to increase by 0.3% monthly, and by 0.5% annualized. Forex traders can compare this to the US Import Price Index for November, which increased by 0.2% monthly, and which decreased by 1.3% annualized. The US Import Price Index excluding Petroleum for December is predicted to increase by 0.1% monthly. Forex traders can compare this to the US Import Price Index excluding Petroleum for November, which increased by 0.2% monthly. The US Export Price Index for December is predicted to increase by 0.2% monthly, and to decrease by 1.0% annualized. Forex traders can compare this to the US Export Price Index for November, which increased by 0.2% monthly, and which decreased by 1.3% annualized.
- US Business Inventories: US Business Inventories for November are predicted to decrease by 0.1% monthly. Forex traders can compare this to US Business Inventories for October, which increased by 0.2% monthly.
- US NAHB Housing Market Index: The US NAHB Housing Market Index for January is predicted at 74. Forex traders can compare this to the US NAHB Housing Market Index for December, which was reported at 76.
Should price action for the AUDUSD remain inside the or breakout above the 0.6880 to 0.6915 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.6900
- Take Profit Zone: 0.7065 – 0.7125
- Stop Loss Level: 0.6860
Should price action for the AUDUSD breakdown below 0.6880 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.6860
- Take Profit Zone: 0.6725 – 0.6770
- Stop Loss Level: 0.6900
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