By Fast Brokers – The Dollar is skyrocketing across the board as the Yen begins to crash as well, signaling investors are making a run for safety. The AUD/USD is participating fully as investors still have a sour taste in their mouths following the RBA’s decision to halt its rate hike. The ECB and BoE followed suit by taking a neutral wait and see approach. Meanwhile, Australia’s Retail Sales data disappointed estimates and Building Approvals outperformed, setting a mixed tone for Australia’s economy. Additionally, America’s data set disappointed this morning with a pop in Unemployment Claims, productivity, and earnings. Hence, economic fundamentals were altogether negative today, adding downward pressure on the AUD/USD and other major Dollar pairs. The scale truly tipped after the IMF issued a warning concerning Portugal’s deteriorating fiscal situation. Now the EU must take fire for debt troubles in two member countries, adding to already rising investor uncertainty. All of the events listed above proved a lethal combination for the risk trade, resulting in a huge leg down in the AUD/USD. The currency pair has tumbled below December 2009 lows and is currently fluctuating within September 2009’s trading range. The RBA will deliver its monetary policy statement during tomorrow’s Asia trading session, likely yielding further volatility for the AUD/USD. The U.S. will also release its headline Unemployment Rate along with Non-Farm Employment Change data. Hence, the FX markets should remain very active as the trading week comes to a close.
Technically speaking, we’ve had to manufacture some new uptrend lines with run through April 2009 levels, or the .70 area. Hence, this gives investors an idea in regards to the extent of the AUD/USD’s recent deterioration. As for the topside, the AUD/USD faces multiple downtrend lines along with September 2009 highs.
Price: .8676
Resistances: .8692, .8711, .8729, .8749, .8763, .8780
Supports: .8662, .8647, .8627, .8607, .8587, .8562
Psychological: .90, January highs and December lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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