27 May 2014
AUD/USD gave away gains
FXStreet (Edinburgh) - The AUD/USD is back to where it's started on Tuesday, surrendering earlier gains and creeping back to the 0.9240/35 region.
How strong has the move been?
Spot continues to correct lower from early morning peaks around 0.9280 amidts a generalized strength surrounding the greenback. Later on, positive results from the US docket intensified the sentiment favouring the USD, weighing on the pair. "Lows in spot iron ore dating to Sep 2012 and the slide in consumer sentiment are likely to keep weighing on AUD near term. Markets are now pricing a 1/6 chance of a rate cut by Christmas. While our base case is no change in rates until Q3 15, it is hard to see near term domestic news quashing the rate cut notion, with e.g. capex (Thu) set for another fall. US yields sticking near multi-month lows limits the damage on AUD/USD but a test of 0.9160/70 still seems in prospect”, commented analysts at Westpac Global Strategy Group.
What price levels and patterns have to be considered?
Current price is 0.9241, with resistance ahead at 0.9250 (Daily Classic R1), 0.9252 (Yesterday's High), 0.9252 (Weekly High), 0.9254 (Hourly 20 EMA) and 0.9261 (Daily Classic R2). Next support to the downside can be found at 0.9240 (Hourly 100 SMA), 0.9239 (Daily Classic PP), 0.9237 (Daily Open), 0.9235 (Daily Low) and 0.9230 (Yesterday's Low). Looking at price patterns, we can see a Doji 4-hour candlestick formation.
How strong has the move been?
Spot continues to correct lower from early morning peaks around 0.9280 amidts a generalized strength surrounding the greenback. Later on, positive results from the US docket intensified the sentiment favouring the USD, weighing on the pair. "Lows in spot iron ore dating to Sep 2012 and the slide in consumer sentiment are likely to keep weighing on AUD near term. Markets are now pricing a 1/6 chance of a rate cut by Christmas. While our base case is no change in rates until Q3 15, it is hard to see near term domestic news quashing the rate cut notion, with e.g. capex (Thu) set for another fall. US yields sticking near multi-month lows limits the damage on AUD/USD but a test of 0.9160/70 still seems in prospect”, commented analysts at Westpac Global Strategy Group.
What price levels and patterns have to be considered?
Current price is 0.9241, with resistance ahead at 0.9250 (Daily Classic R1), 0.9252 (Yesterday's High), 0.9252 (Weekly High), 0.9254 (Hourly 20 EMA) and 0.9261 (Daily Classic R2). Next support to the downside can be found at 0.9240 (Hourly 100 SMA), 0.9239 (Daily Classic PP), 0.9237 (Daily Open), 0.9235 (Daily Low) and 0.9230 (Yesterday's Low). Looking at price patterns, we can see a Doji 4-hour candlestick formation.