Sep
4
2010

 

AUD/USD Challenges August Highs

The Aussie outperformed again on Friday as the risk trade rallied across the board in reaction to stronger than expected U.S. employment data.  The Aussie was already in a favorable position after Australia’s GDP data topped analyst forecasts.  Should the U.S. employment market continue to improve then this would clearly give the RBA a green light to raise its benchmark rate again in order to contain inflation pressures.  Speaking of inflation, soft commodities are soaring higher as global leaders clamor about the potential for food shortages.  If agricultural commodities test 2008 highs then the RBA would be under more pressure to tighten liquidity, particularly since Australia’s economy should benefit from higher wheat prices.  The RBA has often cited economic headwinds blowing from the West as reasoning behind hesitating to pull the trigger on another rate hike.  Hence, if U.S. fundamentals stabilize and improve then we would likely see tighter liquidity from the RBA and a stronger Aussie.  However, many question marks remain regarding the sustainability of the global economic recovery so investors should still tread with a bit of caution.  Australia will release job advertisements data on Monday and it wouldn’t be surprising if the figure tops last month’s 1.3% reading considering the positive data we’ve been receiving from Australia lately.    
Technically speaking, the Aussie faces technical barriers in the form of 9/3 and 8/6 highs.   As for the downside, the Aussie has multiple medium-term uptrend lines working in its favor along with 9/3 lows.  Meanwhile, the highly psychological .90 level becomes a technical cushion once again.  
Price: .9166
Resistances: .9181, .9195, .9204, .9219, .9239
Supports: .9161, .9145, .9127, .9114, .9096, .9076
Psychological:  .90, August Highs
 
 
 

 
Posted by: Matthew Myers

 

Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither as 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. All materials are property of Fast Trading services, LLC and unless otherwise indicated, any unauthorized reproduction is prohibited.

 

 
support