By Fast Brokers – The Aussie has reversed course from Wednesday lows after Australia reported a surprise trade surplus, countering yesterday’s sluggish GDP reading. Export demand held strong last month, countering fears of a slowdown in China with purchases of iron ore climbing. Meanwhile, the Aussie also benefitted from a broad based risk rally since no news from the EU seems to be good news. The S&P futures soared ahead of key U.S. employment data, placing the risk trade in a favorable position should U.S. employment improve. On the other hand, downward pressures remain and the Aussie’s first step would be to overcome 5/28 highs. Regardless, the solid trade balance data is a welcome development for the Aussie since building approvals and GDP disappointed earlier this week. However, it is unlikely a trade surplus alone will make the RBA get aggressive again considering the headwinds blowing from the EU. That being said, investors should continue to monitor conditions in the EU since fiscally trouble nations are still unstable. Activity should pick up as the trading session progresses. The UK will release HPI and services PMI data points followed by advance employment and services PMI figures from the U.S. Hence, the trading week could close on a volatile note.
Technically speaking, the Aussie still faces multiple downtrend lines along with 5/28 and 5/18 highs. As for the downside, the Aussie has technical cushions in the form of 6/2 and 5/25 lows. Additionally, the psychological .823area could serve as a solid technical cushion should it be tested.
Price: .8477
Resistances: .8503, .8535, .8556, .8586, .8614, .8636
Supports: .8468, .8452, .8432, .8410, .8390, .8374, .8356
Psychological: .85, .83,.80, May lows
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Market Commentary provided by Fast Brokers.
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