The Australian dollar is doing exceptionally well all things considered – it’s a fair to say that with the weakening Australian profile that prompted the RBA to cut rates this week we could have probably expected that the Aussie would at least retest the very important support zone at 1.0220/40.
Tonight the key short term region is the 1.-280 level which is a very short term double bottom on the hourly charts but also uptrend support just a little below that level which also happens to be the top of the old downtrend – so 1.0260/80 is going to be very important overnight:
Today’s PSI data for mine just adds more pressure on the Aussie but unless or until it breaks this level and last week’s low at 1.0225 then the Aussie is just trapped in a big old range. Unless the USD falls out of bed again I reckon we’ll see the bottom end of this range tested again pretty soon and if it breaks it’s below parity we probably go. Time will tell – respect the range until it breaks.
All the best
Gregory McKenna
www.twitter.com/gregorymckenna
Please remember these are not recommendations for you to trade these are my views and I have my risk management tools and risk parameters that you do not have access to. Thus, this blog is for information only and does not constitute advice. Neither Greg McKenna nor Lighthouse Securities has taken your personal circumstances, objectives or financial situation into account. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.