By Fast Brokers – The Aussie surged during the Asia trading session after Australia’s Employment change number printed over 3 times stronger than analyst expectations and the headline Unemployment Rate sank to 5.5%. The encouraging improvement in Australian Unemployment sent the Aussie surging higher as investors speculated that the RBA will keep its monetary policy tight in the anticipation of higher consumption and consumer prices. Meanwhile, China’s CPI printed weaker than anticipated even though new loans surged. Hence, it seems China can leave its liquidity relatively loose since prices are under control, appositive development for Australia and anticipated demand for its commodities. However, the Aussie is trading off of intraday highs as the Dollar appreciates across the board in reaction to the EU Summit and a decline in U.S. weekly Unemployment Claims. The EU announced that it plans to help Greece deal with its troubling fiscal situation, yet provided few details. Investors are reacting negatively to the lack of clarity, sending the Euro tumbling lower. Additionally, an improvement in U.S. employment is a positive for the Dollar since the Fed has implied that it is waiting for a turnaround in unemployment before tightening liquidity. Meanwhile, volatility could pick up tomorrow with the release of Germany’s Prelim GDP followed by U.S. retail sales and consumer confidence data. Hence, investors should keep a sharp eye on broad-based activity in the Dollar and gold since Australia will be quiet on the data front tomorrow. That being said, the Aussie could maintain a positive bias considering today’s impressive employment data.
Technically speaking, we’ve readjusted our trend lines to compensate for today’s leg up. To the topside the Aussie faces multiple downtrend lines along with 2/3, 2/1, and 1/28 highs. Additionally, the psychological .89 and .90 levels could serve as technical barriers should they be tested. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with 2/2 and 2/10 lows.
Price: .8851
Resistances: .8869, .8885, .8901, .8921, .8935, .8956
Supports: .8842, .8826, .8808, .8794, .8778, .8762
Psychological: .88, .89, February highs and lows.
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regardedneither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
