By Fast Brokers – The Aussie is moving higher right now in reaction to today’s U.S. data set. U.S. Existing Home Sales printed about in line with analyst expectations, yet remain well below desired levels to establish a lasting economic recovery. The expected figure is proving positive for the risk trade across the board since this implies that the Fed may need to keep its monetary policy loose. An extension of dovish monetary policy in the U.S. bodes well for the Aussie due to the RBA’s comparatively hawkish monetary stance. China is standing firm on its bid to keep the Yuan pegged, also a positive development for the Aussie since a weak Yuan helps fuel China’s recovery while boosting the nation’s demand for Australia’s commodities. Meanwhile, all eyes remain fixated on the EU as European leaders play tug of war in regards of how to deal with Greece. Although a resolution is looking less likely as this week’s EU meeting approaches, if a solution does emerge this could be a boon for the Aussie and the risk trade as a whole. Britain will also release its budget and investors will be looking for a conservative plan to keep the UK’s deficit from ballooning further. Australia will be quiet on the data wire for the remainder of the week, possibly leaving the Aussie’s performance correlated with the risk trade. Meaning investors should keep their eyes on headlines out of Europe along with upcoming EU and U.S. data points, including tomorrow’s EU Flash PMI data set along with U.S. New Home Sales and DGO.
Technically speaking, the Aussie is knocking on the door of our downtrend line and an eclipse could yield a retest of March 18th highs. That being said, the Aussie still has some medium-term downtrend lines hanging above along with 3/17 highs. As for the downside, The Aussie has our uptrend line serving as a technical cushion along with intraday and March 22nd lows. Additionally, the psychological .91 and .90 level could serve as solid technical cushions should they be tested.
Price: .9182
Resistances: .9191, .9209, .9224, .9234, .9251
Supports: .9157, .9136, .9127, .9120, .9106, .9091
Psychological: .91, .90, 2010 highs
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