By Fast Brokers – The AUD/USD has recovered from yesterday’s pullback by bouncing off our 2nd tier uptrend line and the psychological .89 level. The Dollar experienced another large broad-based rally as investors remained concerned about EU debt. Furthermore, the Fed shocked markets after hours by announcing it is raising the discount rate by 25 basis points. Hence, the Fed is sending a message that the emergency window is shutting and possibly serves as the first move for the central bank’s exit strategy. Investors bought up the Dollar in reaction and the Aussie participated, though to a lesser extent. The AUD/USD remains the strongest out of most major Dollar pairs since the RBA has the tightest monetary stance among developed nations. The possibility of another rate hike from the RBA should economic fundamentals improve has created a relative strength for the Aussie as uncertainty increases in the EU and UK. However, should conditions in the EU, UK and U.S. deteriorate while China tightens the RBA may be discouraged again from tightening itself. Therefore, investors should keep an eye on global econ data as it rolls in. Speaking of which, although Australia will be relatively quiet on the data wire next week, investors will continue to receive key data points from the U.S. and Europe.
Technically speaking, the Aussie has multiple uptrend lines serving as technical cushions along with intraday 2/15, and 2/12 lows. As for the topside, the Aussie has multiple downtrend line serving as technical barriers along with the highly psychological .90 level. Furthermore, 1/28 and 2/17 highs could serve as technical obstacles should they be reached.
Price: .8935
Resistances: .8949, .8964, .8984, .9005, .9026, .9045
Supports: .8917, .8903, .8884, .8859, .8842, .8823
Psychological: .90, .89
Market Commentary provided by Fast Brokers.
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