By Fast Brokers – The AUD/USD is experiencing a sizable leg down after the Reserve Bank of India surprised markets by hiking interest rates by 25 basis points. The move sent shockwaves throughout the FX markets, exacerbating risk-averse flows after the Dollar was already strengthening in the midst of EU uncertainty. Sarkozy has reiterated Frances support for Greece, pitting the EU’s two largest economies against one another. Australia was holding up relatively well even with huge selloffs taking place in the Cable and EUR/USD. However, the RBI’s rate hike has had a considerable impact on the Aussie due to Australia’s economic exposure to India. Meanwhile, the data wire is very quiet today, placing added emphasis on today’s news events. It will be interesting to see how the Aussie holds up as the trading session progresses. Due to the extent of the respective pullbacks in the EUR/USD and Cable it wouldn’t be surprising to see some buyers enter the market on oversold conditions. Such a wave could benefit the Aussie and keep the currency pair above our 2nd tier downtrend line, which runs through 3/15 lows. Therefore, investors should continue to monitor broad-based activity in the dollar for the remainder of the day.
Technically speaking, the Aussie multiple downtrend lines serving as technical barriers along 3/16 and 3/12 highs. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with 3/16 and 3/15 lows.
Price: .9142
Resistances: .9153, .9162, .9169, .9177, .9185, .9192
Supports: .9139, .9132, .9122, .9116, .9110, .9100
Psychological: .91, .90, 2010 highs
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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