The AUD/USD broke the $1.07 mark twice since Tuesday. The previous time it reached this mark was on August 4. Th new range looks to be 1.065 to 1.065 and the US Market movement will dominate the direction.

At the local ASX close, the Australian dollar was trading at 106.86 US cents, up from 106.49 cents on Tuesday.

Currency markets are awaiting US August private payrolls data from the ADP Employment Agency.

The private payrolls report is a key pointer as to how the August non-farm payrolls numbers will go, which is the official measure of the US unemployment rate.

Data out this week week includes measures of retail sales, private sector credit, building approvals, and the manufacturing PMI. Next week we will see data on services, construction PMI, GDP for the second quarter, employment figures, as well as the RBA interest rate decision.


In the daily time frame the AUD/USD has moved about some important moving averages including the 100, the 21 and the 55 EMA's.

This puts the AUD/USD pair at its highest level since the first week of August.

We also currently test the 61.8% retracement of the full downswing from our highs near 110.85 down to 0.9940.

The RSI is showing momentum pointing upward and we have room to go before we get to overbought territory.

The question now is can the Australian dollar continue this pace of increases against the US dollar and rally towards the next set of important pivots at 1.0790 and beyond to the highs set in late July near 1.1080? The answer will lie in the fundamental data we get over the next two weeks, as that will determine what the RBA will do next in terms of interest rates.

Australian stocks have ended higher, after oscillating between gains and losses for large parts of the day, but are still down for the month.

The benchmark S&P/ASX200 index rose 27.3 points, or 0.6 per cent, to close at the day's high of 4296.5, while the broader All Ordinaries index gained 28.5 points, or 0.7 per cent, to 4369.9. Among the sectors, materials added 0.9 per cent and financials rose 0.7 per cent.

Despite the late dash, the benchmark index still fell 2.9 per cent for the month, marking its fifth consecutive monthly fall. The index is also down 13.6 per cent from this year's highs in mid-April, as the European debt woes and US growth doubts sap investor confidence.


Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.