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AUD/USD Signal - U.S. Industrial Production - 17 Mar 2017

Signal details
Entry Price: 
0.7679
Close Price: 
0.7699
Direction: 
High
Expiry Time: 
21:00 GMT
Result: 
ITM
How we trade
5/5 of 3 ratings

U.S. industrial production numbers are expected to be released later today and based on the survey of economists polled, the industrial production in the U.S. is expected to post a rebound. Economists expect a 0.3% increase in industrial production. This follows January's 0.3% decline and could be seen a reversing the losses if the headline data matches estimates.

The decline in industrial production came despite manufacturing output rising 0.2% while mining output jumped 2.8%. The data for January showed that the index for utilities posted the biggest decline, falling 5.7% during the month. The declines were attributed to the unusually warm weather which led to an unseasonal high demand for heating.

On a year over year basis, in January, industrial production remained flat. Alongside industrial production figures, capacity utilization rate is also expected to be released. Economists polled expect to see the capacity utilization rate rise to 75.5% in February, up from 75.3%.

The capacity utilization rate along with industrial production is a leading indicator on consumer inflation. When the capacity utilization rate runs near full capacity, it indicates rising consumer prices. The U.S. dollar has significantly weakened following the Fed’s decision to hike rates. However, we can expect to see a short term reversal.

AUDUSD which has posted strong gains in the past few weeks is seen trading weaker earlier today, extending the declines from the day before. The currency pair has been largely consolidating over the past two days but a break out is likely. The pull back to the downside could be seen as a short term correction. Therefore, look to buy daily PUT options below 0.7679 as AUDUSD could be seen dipping lower towards 0.7620.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.