By Fast Brokers – The AUD/USD is balancing around its psychological .85 level after Fitch’s Spain downgrade sent the risk trade lower on Friday. However, the Aussie has been outperforming over the past few trading sessions ahead of tomorrow’s key data. Australia will release retail sales and building approvals data followed by and RBA rate decision. Hence, tomorrow could prove to be a make or break session for the Aussie. Should Australia’s economic data top expectations and the RBA give a neutral to positive outlook, the Aussie could extend its impressive upswing from previous May lows. However, conditions in the EU are still unstable and there’s a high probability of a psychological event hitting again this week. Regardless, the Aussie will have enough data and news of its own to either exhibit a relative strength or weakness. The RBA was more cautious in its previous meeting minutes, meaning the odds of a rate hike tomorrow are low. Additionally, problems in the EU could keep the RBA in a defensive position. Therefore, more emphasis may be placed on the retail sales and building approvals data. The Aussie has edged above some key downtrend lines and the EUR/USD and Cable have been trying to build a base over the past few sessions, meaning the Aussie could be poised for another solid near-term topside run should events unfold in a positive manner. On the other hand, these markets are very unpredictable and the possibility of a retracement exists. Hence, investors should be wary and keep a close watch on the wires.
Technically speaking, the Aussie still faces multiple downtrend lines along with intraday and 5/28 highs. As for the downside, the Aussie has technical cushions in the form of 5/28 and 5/19 lows. Additionally, the psychological .82 area could serve as a solid technical cushion should it be tested.
Price: .8492
Resistances: .8503, .8514, .8536, .8551, .8565, .8584
Supports: .8470, .8452, .8426, .8404, .8380, .8356
Psychological: .85, May lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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