By Fast Brokers – The RBA in fact opted to keep its benchmark rate in check during today’s Asia trading session as the central bank monitors slight price declines and gauges the impact from China’s more hawkish monetary policy stance. The RBA’s decision surprised markets and resulted in an immediate selloff since a majority of analysts were pricing in a 25 basis point hike. Losses in the AUD/USD were sizable, yet the currency pair managed to bottom out just around Monday lows. Therefore, the currency pair appears to have salvaged a more extensive collapse for the time being and is presently strengthening in light of better than expected U.S. Pending Home Sales data. Strong U.S. housing data has led investors back to the risk trade so far while gold strengthens above its psychological $1100/oz level. In fact, the precious metal has broken out of our 3rd tier downtrend line, a positive sign for the Aussie since the trend line runs through the $1140/oz level. Attention will shift back to Australia during tomorrow’s Asia trading session with the release of Australia’s Trade Balance. The Trade Balance data could have a considerable impact on the Aussie since analysts will likely dissect the numbers to get a better idea of how demand for the country’s exports is faring. Should export data print strong this could provide some upward momentum for the AUD/USD since investors will assume that the RBA is taking a wait and see approach in regards to its monetary policy. However, weak export demand could sound an alarm and yield a retreat in the currency pair. Additionally, the U.S. will release Services PMI and ADP Employment Change data. Hence, the AUD/USD could remain active for the next 24-48 hours as investors digest the wealth of data and news.
Technically speaking, the AUD/USD has our 1st and 2nd tier uptrend line serving as technical cushions along with intraday lows and the psychological .8800 area. As for the topside, the AUD/USD faces multiple downtrend lines along with 2/1 and intraday highs.
Price: .8824
Resistances: .8835, .8850, .8863, .8879, .8891
Supports: .8808, .8798, .8780, .8767, .8750, .8740
Psychological: .90, January highs and December lows
Market Commentary provided by Fast Brokers.
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