By Fast Brokers – Australian home prices came in stronger than anticipated today, an encouraging development for the Aussie considering the RBA will announce its monetary policy decision tomorrow. Recent uncertainty in the EU coupled with this weekend’s announcement from China that it is raising its reserve ratio again could lead the RBA to keep its benchmark rate unchanged. While fiscal issues in the EU challenge the sustainability of the global economic recovery, tightening in China could effectively slow China’s growth, a negative for the Aussie since the currency pair is thriving off of Asian demand for the nation’s commodities. Additionally, the RBA’s Stevens recently mentioned that interest rates may be approaching par, a signal that the rate hikes could be coming to an end. However, the RBA still seems to be leaning towards a hawkish stance, meaning there’s certainly potential for another rate raise tomorrow. That being said, the Aussie could experience a boost in volatility during tomorrow’s Asia trading session due to slight uncertainty surrounding the RBA’s decision. Even if the RBA should raise rates again, any more language regarding an end to the central bank’s hawkish stance could prove negative for the Aussie. Meanwhile, investors are looking ahead to today’s U.S. manufacturing PMI release along with any more psychological developments regarding Greece and the UK parliamentary elections.
Technically speaking, the Aussie faces technical barriers in the form of intraday, 4/30, 4/26, 4/21, 4/15 and 4/12 highs. Additionally, the psychological .93 and .94 levels could continue to serve technical obstacles over the near-term. As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with intraday and 4/28 lows.
Price: .9262
Resistances: .9264, .9273, .9283, .9291, .9300, .9313
Supports: .9245, .9235, .9224, .9216, .9208, .9194
Psychological: .93, .94, .92, April highs and lows
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Market Commentary provided by Fast Brokers.
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