By Fast Brokers – The Aussie has undergone a hefty sell-off over the last 24 hours as the risk trade deteriorates across the board. News that Spain has taken control of a regional bank accompanied by a warning from the IMF gave investors fuel to punish the major dollar pairs again, and the Aussie was no exception. The Aussie sank back towards previous May lows and its psychological .80 level and is presently trying to bounce back after U.S. CB consumer confidence data topped estimates. However, momentum is still clearly to the downside and investors should keep a close eye on the EU news wire. Meanwhile, Asia equities joined the sell-off with the SCI dropping by another -2% and the Nikkei by over -3%. In addition to negative news from the EU, investors are becoming increasingly concerned about conditions in Korea after news emanated that North Korea mobilized its military last week should South Korea attack in retaliation to the realization that the North sunk their sub. Though North Korea is prone to talk a good talk with little action, investors should still keep a close eye on the situation for a military conflict could wreck havoc on the risk trade. Australia will release construction data tomorrow, though attention will likely remain focused on developments in the EU and UK.
Technically speaking, the Aussie faces technical barriers in the form of multiple downtrend lines along with intraday and 5/21 highs. As for the downside, the Aussie has technical cushions in the form of May 2010 and September 2009 lows. Additionally, the psychological .80 area could serve as a solid technical cushion should it be tested.
Price: .8161
Resistances: .8178, .8205, .8224, .8246, .8268, .8303
Supports: .8150, .8123, .8101, .8086, .8066, .8053
Psychological: .80, .83, May 2010 and September 2009 lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
Disclaimer: FastBrokers’ market commentary is provided for information purposes only and under no circumstances should be regarded neither as an investment advice nor as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
