By Fast Brokers – The Aussie has dropped below its uptrend line running through 2/26 lows, or the .89 area. Hence, the Aussie appears to have finally made a key retracement after holding strong for so long despite large risk-averse flows resulting from fiscal issues in the EU. The currency pair is quickly dropping towards its highly psychological .90 level, which could prove to be a solid technical cushion for the near-term. Investors are reacting negatively to RBA Governor Stevens’ public address today. Although Stevens didn’t make comments directly pertaining to the RBA’s policy in particular, his outlook regarding Western developed countries was far from picturesque. Governor Stevens warned that risk premiums could continue to rise as nations struggle to reduce their respective fiscal deficits. Hence, it appears Stevens is bothered by recent deteriorations in the EU, implying that the RBA could keep its interests rates unchanged at the next RBA meeting. Govern Stevens’ somber outlook is dragging the Aussie lower, meaning the currency pair could participate more fully in broad-based moves in the risk trade over the near-term. That being said, the data wire is relatively quiet on Monday, suggesting that current momentums could continue to play out barring a key psychological development.
Technically speaking, the Aussie has 3/3 and 3/ 4 lows serving as technical cushions along with the highly psychological .90 level should it be tested. As for the topside, the Aussie faces multiple downtrend lines along with intraday and 3/25 highs. Additionally, the psychological .91 level could serve as a technical barrier should it be tested.
Price: .9040
Resistances: .9045, .9053, .9073, .9087, .9101, .9110
Supports: .9032, .9023, .9011, .8994, .8981, .8974
Psychological: .90, .91, March Lows
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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