By Fast Brokers – The AUD/USD has dipped back below its psychological .92 level, giving back some of its weekly gains in the process. The Euro is undergoing a heavy selloff in reaction to another psychological flare taking off in the EU. Greece has set the stage for a showdown with Germany by giving the EU one week to come up with sufficient measures for financial assistance before Greece heads to the IMF for help. Uncertainty in the EU and resulted in a broad based Dollar rally, dragging the Aussie and the Cable lower with it. However, losses in the Aussie have been relatively minimal thus far compared to the EUR/USD. The Aussie has been performing comparatively well in general due to the RBA’s tight monetary policy stance amid continual strength in Australia’s economy. However, it remains to be seen whether the Euro’s downturn will spill over further into other major Dollar pairs. Therefore, investors should keep a sharp eye on the Aussie and its interaction with present technical levels. Australia has been quiet on the data front this week, leaving its movements up to broad-based activity in the risk trade. Hence, it will be interesting to see if the Euro can manage to stabilize after today’s hefty selloff and allow the Aussie to remain locked into its uptrend.
Technically speaking, the Aussie multiple downtrend lines serving as technical barriers along with previous March highs. 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, 3/17, and 3/16 lows.
Price: .9192
Resistances: .9196, .9207, .9215, .9229, .9239, .9250
Supports: .9184, .9177, .9171, .9161, .9153, .9139
Psychological: .92, .93, 2010 highs
(click chart to enlarge)
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