By Fast Brokers – The Aussie is marching higher, outperforming most major dollar pairs as the risk trade rallies in the wake of solid U.S. economic data. U.S. Retail Sales surpassed analyst expectations while prices remained in check, signaling that even though America’s economic recovery is gaining traction the Fed is unlikely to tighten any time soon. In fact, Fed officials continue to voice their concern regarding the lag in unemployment. Hence, as the timeline for a tighter Fed monetary policy gets extended higher yielding, such as the Aussie, are benefitting. Australia’s consumer confidence came in strong today, a reassuring development considering recent economic data has been disappointing. However, it remains to be seen whether the RBA will have enough confidence in Australia’s recovery to boost rates next month even though most fundamental data points have shrugged lately. All eyes will be on China during tomorrow’s Asia trading session with GDP, CPI, Industrial Production, etc. on the way. Should China’s economic data outperform, this could send the Aussie higher in anticipation of greater demand for Australia’s commodities. On the other hand, any hint of a slowdown in China could weigh on Aussie for the opposite reason. Regardless, tomorrow’s trading session could prove to be an active one considering America will follow with important manufacturing and employment data. Regardless, the risk trade appears to be locked into its uptrend at the moment with the EUR/USD and Cable breaking out, a positive sign for the Aussie.
Technically speaking, the Aussie faces technical barriers in the form of precious April highs. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 4/12, and 4/6 lows. Additionally, the psychological .93 level could serve as technical cushion over the near-term.
Price: .9352
Resistances: .9359, .9373, .9391, .9403, .9410, .9432
Supports: .9342, .9327, .9315, .9289, .9272
Psychological: .93, .92, November 2009 highs, April highs and lows
(click chart to enlarge)
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