By Fast Brokers – The AUD/USD has bounced from Monday lows after dipping below .91 and touching our key 2nd tier uptrend line. The Aussie followed the EUR/USD and Cable lower amid a wave of risk-aversion in reaction to statements from Moody’s warning developed countries with increasing debt exposure to get their fiscal houses in line or face the possibility of a credit downgrade in the future. Uncertainty, particularly in Europe, weighed on the Aussie as investors speculated that more debt issues could dissuade the RBA from tightening its monetary policy again. However, the Aussie has staged a solid rebound thus far today, finding support in our key 2nd tier uptrend line which runs through 3/9 lows. The RBA issued its meeting minutes today and the notes showed the RBA is holding its monetary stance for the time being and stands ready to tighten or loosen depending on fundamental conditions. That being said, the RBA still seems to be leaning towards a hawkish monetary policy so long as employment and consumption continue to improve. However, last week’s negative employment and housing reports have decreased the expectations of a rate hike at the central bank’s next meeting. Meanwhile, focus will likely be on the U.S. with building permits data and an FOMC meeting on the way. Should the FOMC maintain its loose monetary language then they risk trade could receive a boost. On the other hand, any hawkish language alteration could have a negative impact on the Aussie in anticipation of tighter monetary policy from the Fed.
Technically speaking, the Aussie has multiple uptrend lines serving as technical cushions along with intraday lows, 3/15 lows, 3/9 lows, and the psychological .90 area. As for the topside, the Aussie has multiple downtrend lines serving as technical barriers along with the psychological .92 area. Additionally, previous 2010 highs could serve as a hefty technical barrier should they be tested.
Price: .9146
Resistances: .9160, .9171, .9186, .9194, .9213, .9227
Supports: .9137, .9126, .9114, .9104, .9090, .9073
Psychological: .92, .90, 2010 highs
(click chart to enlarge)
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