By Fast Brokers – The Aussie is barreling lower today as the currency pair continues to be an underperformer among the major dollar pairs. The driving forces remain the same. The RBA’s rate hike regime seems to be coming to an end, deflating the relative strength build up in the Aussie built up over the past 10 months. Hence, the currency pair finds itself more exposed to fiscal issues in the EU as well as debt concerns in the UK and EU. Secondly, the Shanghai Composite is continuing its own freefall with the index headed towards 2500. As we’ve explained repeatedly, weakness in China equates to weakness in Australia since China’s demand for Australia’s resources as been fueling RBA rate hikes and consequently Aussie gains. Meanwhile, the CAC and DAX are both down around -2% right now as uncertainty in the EU weighs on equities around the globe. Australia will be absent from tomorrow’s data wire, leaving the Aussie up to present momentum and any new developments in the EU over the next 24-48 hours.
Technically speaking, the Aussie faces technical barriers in the form of intraday highs and the psychological .85 level. As for the downside, the Aussie has technical cushions in the form of intraday and September 2009 lows.
Price: .8251
Resistances: .8272, .8291, .8314, .8329, .8341, .8363, .8384
Supports: .8251, .8224, .8195, .8172, .8154, .8138
Psychological: .85, .84, .83, July and August 2009 lows
Market Commentary provided by Fast Brokers.
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