By Fast Brokers – The Aussie has dropped through 5/5 lows and a key uptrend line. Hence, if there is a thorough confirmation to the downside the Aussie could be sending technical signals that a more protracted downturn may be approaching. Considering the performance of the Aussie tends to be inextricably tied to China, this could be foreboding of more problems in the Far East. However, before we get ahead of ourselves we would need to see a clear downside confirmation in the Aussie along with accompanying psychological developments. Meanwhile, the Aussie is underperforming today after the RBA meeting minutes showed that the central bank’s rate hikes could be coming to an end. Problems in the EU as well as new restrictive real estate rules in China are enticing the RBA to pause and see how Australia’s economy fares. Speaking of which, the RBA noted that higher interest rates are beginning to have a noticeable impact on economic performance, further solidifying a more neutral rate stance next month. Australia will release consumer sentiment and wage price data tomorrow followed by U.S. CPI. However, focus should remain on the ability of the Shanghai Composite to stabilize and EU jitters to calm. Should either condition worsen then the Aussie could find itself confirming our suspicion.
Technically speaking, the Aussie faces technical barriers in the form of intraday and 5/5 highs. As for the downside, the Aussie has technical cushions in the form of intraday lows and the psychological .87 and .86 levels.
Price: .8754
Resistances: .8765, .8782, .8803, .8822, .8843, .8855, .8869
Supports: .8744, .8734, .8721, .8709, .8693, .8681
Psychological: .89, .88, .87, May lows
Market Commentary provided by Fast Brokers.
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