By Fast Brokers – The AUD/USD is working to consolidate above its psychological .90 level as we witness heightened market activity in the Dollar and U.S. equities. The S&P futures and gold tumbled yesterday after U.S. Unemployment Claims popped back towards the 500k level and investor uncertainty increased over fear that Obama’s proposed regulation of the financial industry could weigh on the earnings of banks. The ADU/USD participated to the downside, exhibiting its positive correlation with gold as the precious metal sunk below its psychological $1100/oz level. Furthermore, the Aussie has been hit by a tighter monetary policy stance in China. China’s demand for Australia’s commodities has been a driving force behind Australia’s strong economic performance. Hence, if China cools down, this could also slow down Australia, thereby discouraging Australia’s central bank from tightening once again. However, investors should keep in mind that Australia’s economic data has been printing strong lately, particularly in employment. Australia will kick off next week with PPI data during Monday’s Asia trading session. The Aussie could receive extra attention during this time frame since behavior of prices could determine whether Australia raises rates again or not. That being said, should PPI print strong the AUD/USD could experience a nice pop. On the other hand, a weak PPI could place considerable downward pressure on the Aussie since investors may speculate that the central bank will hold off considering tightening in China.
Technically speaking, the AUD/USD faces multiple downtrend lines along with intraday and 1/21 highs. As for the downside, the AUD/USD has multiple uptrend lines serving as technical cushions along with 1/21 lows and the psychological .90 level should it be retested.
Price: .9050
Resistances: $77.48. $77.87/bbl, $78.33/bbl, $78.76/bbl, $79.25/bbl
Supports: $77.10/bbl, $76.69/bbl, $76.15/bbl, $75.63/bbl, $75.32/bbl
Psychological: $80/bbl, $75/bbl, January highs and lows
Market Commentary provided by Fast Brokers.
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