By Fast Brokers – The Aussie has taken another step higher and is continuing its consistent ascent after the Cable and EUR/USD decided join in on the action yesterday. Both Euro currency pairs experienced sizable breakouts, particularly the Cable, after the Fed decided to keep its loose monetary policy intact. The broad-based risk rally and weakness in the Dollar naturally benefitted the Aussie since the RBA has been one of the biggest hawks around. This week’s breakout in the AUD/USD has gotten the topside momentum going again after relative consolidation into weak employment and housing reports from Australia. That being said, it will be interesting to see if the Aussie can sustain its upward trajectory should Australia’s fundamentals continue to cool. China and the U.S. are in another verbal battle concerning Yuan policy. China is sticking to its guns in regards to keeping the Yuan stable despite calls from the U.S. to appreciate. China’s attitude could prove to be favorable for the Aussie since it helps keep China’s demand for Australia’s commodities stable in the process. Meanwhile, investors will be keying in on Bernanke’s congressional testimony. Additionally, the U.S. will release CPI, Unemployment Claims, and the Philly Index tomorrow. With Australia quiet on the data wire the Aussie could opt to follow its correlation with the risk trade for the remainder of the week.
Technically speaking, the Aussie has our 4th tier downtrend line serving as a technical barrier. Our 4th tier runs through previous 2010 highs and is our last foreseeable downtrend line. Hence, a breakout beyond our 4th tier could signal more substantial topside movements over the near-term. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday and 3/16 lows.
Price: .9219
Resistances: .9230, .9239, .9250, .9264, .9276, .9286
Supports: .9213, .9203, .9195, .9186, .9178, .9171
Psychological: .92, .93, 2010 highs
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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