AUD/USD Climbs with Risk Trade

The Cable experienced a solid pop today as the Dollar weakened across the board in speculation that the ECB will be proactive in addressing Greece’s troubling fiscal situation. Trichet left a central banking meeting in Australia early to head back to the EU, igniting suspicion that the union has a plan for how to deal with Greece. Trichet’s agenda adjustment supplied investors with a perfect excuse to send the risk trade higher considering the extent of last week’s pullback. Meanwhile, the data wire will remain relatively quiet throughout the remainder of today’s trading session. However, activity should begin to pick up tomorrow beginning with the release of Australia’s Home Sales data during the Asia trading session. The RBA’s decision to halt its rate hikes along with weak Retail Sales data spooked investors. Hence, strong Home Sales data could move the AUD/USD higher by increasing speculation that the RBA will have a tighter monetary stance next time around. However, weak economic data could add to the AUD/USD’s current downward pressure. In addition to data from Australia China will release New Loans and Trade Balance numbers. Investors will hone in on the Trade Balance data, particularly imports in regards to the Aussie since strong import data could prove to be a Aussie positive. Furthermore, the BoE will release its Inflation Report along with U.S. Trade Balance data. Hence, tomorrow could prove to be an active session in the FX market.

Technically speaking, the AUD/USD has multiple downtrend lines serving as technical barriers along with intraday and 2/4 highs. As for the downside, the AUD/USD has multiple uptrend lines serving as technical cushions along with intraday and 2/5 lows. Furthermore, the psychological .85 area could serve as a technical cushion should it be tested.

Price: .8730

Resistances: .8749, .8763, .8780, .8793, .8814, .8843

Supports: .8729, .8711, .8689, .8665, .8644, .8627

Psychological: .85, February highs and lows.

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