By Fast Brokers – The Aussie is moving sideways below its psychological .93 level after yesterday’s solid pop past March lows. The RBA decided to stay aggressive with its monetary policy and opted to raise rates by another 25 basis points to 4.25%. Demand from Asia for Australia’s commodities is continuing to power its economy forward. Despite recent slowdowns in housing and retail sales the RBA forecasts rising prices. Hence, the central bank doesn’t seem too hesitant about raising again should economic fundamentals improve. That being said, the RBA’s rate hike has solidified the Aussie’s upward trajectory unless upcoming economic data disappoints. Australia will release key employment figures tomorrow and it will be interesting to see if the RBA’s hawkish stance forebodes of positive employment data. Should tomorrow’s numbers come in strong, this could add to the Aussie’s upward momentum. However, a pullback in employment has the potential to erase weekly gains. Australia will not be the only country busy on the wire with the BoE and ECB making monetary policy decisions of their own during the European trading session. Although both central banks are expected to stand pat, monetary policy statements always carry the potential to move FX markets. Therefore, investors should keep a close eye on the greenback’s reaction as tomorrow’s news hits the wire.
Technically speaking, the Aussie faces technical barriers in the form of intraday and 1/14 highs. Speaking of which, the Aussie is creeping towards previous 2010 highs, meaning the 93 area could prove to be a tough barrier to crack over the near-term. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 4/6, and 3/31 lows. Additionally, the psychological .92 and.91 levels could serve as a technical cushion should it be tested.
Price: .9259
Resistances: .9264, .9278, .9291, .9304, .9316, .9330
Supports: .9247, .9230, .9214, .9194, .9185, .9173, .9161
Psychological: .93, .92 March Lows and Highs
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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