FXstreet.com (Barcelona) - The Aussie is on the rebound in the early going of Asia, with shorts covering after frustration to close below the round 1.02 - Aus exporter buying around 1.0200 to blame - despite the sharp fall in Oil. Helping the upside run are recent comments from Japanese newspaper Mainichi Simbum, suggesting Japan may buy European stability bonds, a rather hilarious excuse for a pop but apparently working so far, as the Aussie tracks the tail of the Euro, up over 20 pips.
The AUD/USD has been and continues to trade at hefty levels if history is of any indication - nearing 1.05 just a week ago/1.0230 at present - however, one should not forget that is has been more about the demerits of the USD on QE3-induced weakness rather than much AUD fundamental fortitude backing up the so called 'darling of the macro FX landscape' as of late.
Maintaining such high levels, despite QE to infinity by the Fed, may be tougher than any other time, as the RBA appears to be willing to consider further rate cuts - market pricing in this scenario - , China still shows little signs of finding a bottom to growth reduction, and without forgetting that each time a Central Bank conducts stimulus, in this case the Fed, the depreciating power it has toward its currency, in theory, tends to diminish.
Technically, the pair has reached a temporal floor around 1.0200; As noted by Valeria Bednarik, Chief Analyst at FXstreet.com, "bounces from the level had been unable to extend beyond 1.0240, leaving a the bearish side exposed." So far, hourly resistance at 1.0235 is holding pretty well. Note that a potential break below 1.0165 will set an important double top around 1.0600.
The FXstreet.com Analyst stresses that risk headlines coming from Australia today, including Retail Sales and Building approvals at 1.30GMT, both expected to have improved, and if proving right, "may trigger an upward corrective movement towards the 1.0300 price zone, where the pair will face strong static resistance" the analyst adds.
Disappoint readings however, "will only exacerbate the bearish mood, and send the pair to test September low of 1.0160. Despite oversold, both 1 and 4 hours charts indicators maintain the negative stance, far from suggesting an upward correction at the time being" she says.
A second take on the Aussie technical, Greg McKenna, Cief Executive Officer at LightHouse Securities, notes that "longer term with the AUD below the 200 day moving average, with our JimmyR indicator negative and with the negative DMI a test of 1.0150/60 support looks likely. Should that break then the AUD is biased back toward 0.9960."
The AUD/USD has been and continues to trade at hefty levels if history is of any indication - nearing 1.05 just a week ago/1.0230 at present - however, one should not forget that is has been more about the demerits of the USD on QE3-induced weakness rather than much AUD fundamental fortitude backing up the so called 'darling of the macro FX landscape' as of late.
Maintaining such high levels, despite QE to infinity by the Fed, may be tougher than any other time, as the RBA appears to be willing to consider further rate cuts - market pricing in this scenario - , China still shows little signs of finding a bottom to growth reduction, and without forgetting that each time a Central Bank conducts stimulus, in this case the Fed, the depreciating power it has toward its currency, in theory, tends to diminish.
Technically, the pair has reached a temporal floor around 1.0200; As noted by Valeria Bednarik, Chief Analyst at FXstreet.com, "bounces from the level had been unable to extend beyond 1.0240, leaving a the bearish side exposed." So far, hourly resistance at 1.0235 is holding pretty well. Note that a potential break below 1.0165 will set an important double top around 1.0600.
The FXstreet.com Analyst stresses that risk headlines coming from Australia today, including Retail Sales and Building approvals at 1.30GMT, both expected to have improved, and if proving right, "may trigger an upward corrective movement towards the 1.0300 price zone, where the pair will face strong static resistance" the analyst adds.
Disappoint readings however, "will only exacerbate the bearish mood, and send the pair to test September low of 1.0160. Despite oversold, both 1 and 4 hours charts indicators maintain the negative stance, far from suggesting an upward correction at the time being" she says.
A second take on the Aussie technical, Greg McKenna, Cief Executive Officer at LightHouse Securities, notes that "longer term with the AUD below the 200 day moving average, with our JimmyR indicator negative and with the negative DMI a test of 1.0150/60 support looks likely. Should that break then the AUD is biased back toward 0.9960."
