By Fast Brokers – Goldman knocked the Aussie from its lofty perch yesterday as the currency pair tumbled below .92 on a spike in volume as risk-aversion set in across the board. The Aussie is also being dragged lower today by more restrictions on real-estate oriented lending in China. The government has taken its most aggressive measure yet by telling banks to stop lending for 3rd home purchases. China real-estate prices flew by over 10% in March and the government is obviously concerning that if it does not get more proactive the repercussions could be devastating. The SCI reacted accordingly by dropping nearly -5% with investors fearing that China’s breathtaking economic growth could cool down. Should China continue to tighten its grip with appreciation or riase rates the Aussie could fall victim to risk-averse money flows once again. Australia’s own impressive growth rate has been fueled by demand from China for its abundant commodity resources, particularly iron ore, oil, and gold. Therefore, a slowdown in China could have a noticeable impact on Australia’s economy, thus weighing down on the Aussie. Meanwhile, the RBA will release its meeting minutes tomorrow and any indication that the central bank is leaning towards keeping rates unchanged could have a negative influence on the Aussie. On the other hand, should the RBA express confidence in Australia’s projected economic performance while hinting at more rate hakes, this could help stabilize the Aussie over the near-term.
Technically speaking, the Aussie faces technical barriers in the form of 4/6 and 4/14 highs. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday, 3/31, and 3/24 lows. Additionally, the psychological .92 area could serve as a technical cushion for the time being.
Price: .9191
Resistances: .9218, .9237, .9257, .9272, .9289, .9300, .9312
Supports: .9179, .9162, .9151, .9139, .9127, .9110
Psychological: .93, .92, April highs and lows
(click chart to enlarge)
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