Despite the recent short-term rally, the fundamentals still point toward a weaker AUD/USD.
Slowing growth in China, the weakening Australian economy and the strong possibility of an interest rate hike by the Fed are three reasons to expect renewed selling pressure on any rallies. Add in the fact that the Reserve Bank of Australia wants a lower currency and you have an additional reason to sell counter-trend rallies.
Today’s release of the latest U.S. retail sales figures for December and the Fed Beige book could be the catalyst behind increased volatility and renewed selling pressure today. Traders expect Core Retail Sales to post a 0.1% gain and month-to-month Retails Sales to show a 0.2% increase. Traders will be looking for expansion in all areas of the country in the Beige Book which is analysis used by the Federal Open Market Committee to help make their next decision on interest rates. It contains information about local economic conditions in the 12 Federal Reserve Districts.
Early in the session on Thursday, traders will get the opportunity to react to the latest Australian Employment Change and Unemployment Rate figures.The employment change is expected to show the economy added 5.3K new jobs. The unemployment rate is expected to remain at 6.3%.
Our recommendation is Short at the levels mentioned:
Entry Level : 0.8052
1st Target : 0.7984
2nd Target : 0.7922
Stop Loss : 0.8152
Skype : rohit.fidelis
