By Fast Brokers – The Aussie is following the risk trade lower as the EUR/USD and USD/JPY head south. Additionally, the Aussie is being hit by the surprise resignation of Prime Minister Rudd. Rudd is handing over the keys to Australia’s first female PM, Julia Gillard. Rudd appears to be taking a sack for the team as opinion polls turn and threaten his Labor Party. Gillard has entered office by hinting at negotiations with Australia’s mining industry after Rudd imposed a hefty tax on the industry. Should Gillard lighten up on the tax this could actually prove to be a positive for the Aussie despite today’s negative reaction. However, we will have to wait and see how the situation materializes since politics is never a straight-forward business. Meanwhile, Australia has been quiet on the data wire, leaving the Aussie up to its positive correlation with the risk trade along with psychological forces. That being said, it will be interesting to see how the risk trade reacts to upcoming U.S. data, including weekly unemployment claims and durable goods orders. The data wire will be relatively quiet across the board tomorrow, meaning present trends should prevails throughout the remainder of the trading week unless there is another psychological development in the EU or China.
Technically speaking, the Aussie faces technical barriers in the form 6/21 and 6/23 highs. Additionally, the highly psychological .90 level should serve as a solid barrier should it be tested. As for the downside, the Aussie is accumulating uptrend lines along with intraday and 6/17 lows. Furthermore, the psychological .85 level should serve as a solid technical cushion should it be reached.
Price: .8671
Resistances: .8671, .8710, .8738, .8764, 8801, .8826, .8859
Supports: .8633, .8613, .8587 .8565, .8543, .8523, .8500
Psychological: .90, .85
(click chart to enlarge)
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