AUD/USD Outperforms After Hawkish Comments from Stevens

By Fast Brokers – The Aussie has posted a considerable rally today in reaction to comments from RBA Governor Stevens implying that he feels uncomfortable with price levels right now, a hint that the central bank could continue its hawkish monetary stance.   This contrasts quotes from Stevens on Friday when he suggested that global economic uncertainty, particularly in the EU, is unsettling.  Hence, Stevens is sending a muddy message, casting a shadow of uncertainty upon the RBA’s next monetary policy meeting.  Regardless, today’s hawkish comments are in the foreground, taking precedence and driving the Aussie higher.  Meanwhile, investors have dipped their toes back into the Euro and Cable in the wake of the EU’s agreement to help Greece should conditions deteriorate further.  The broad-based pop in the risk trade stemming from Friday’s announcement has also benefitted the Aussie.  However, Fitch’s Portugal downgrade lingers while the EUR/USD and Cable battle their psychological 1.35 and 1.50 levels, respectively.  The Aussie also faces its share of technical barriers, though the currency pair still flexes its comparative strength.  Though the data wire is quiet today, news will pick up again tomorrow the Final GDP from the U.K. followed by U.S. CB Consumer Confidence.  However, Aussie investors will likely place more emphasis on Wednesday’s Building Approvals and Retail Sales data from Australia.  Should these two data points outperform, this would confirm Stevens’ concern about inflation and stoke speculation that the RBA may raise rates again, a positive for the Aussie.  However, if the data disappoints while the overall risk trade drags the Aussie may not have the momentum to break free of its near-term topside technicals.

Technically speaking, the Aussie has 3/23 and 3/27 highs serving as technical barriers along with multiple downtrend lines.  As for the downside, the Aussie has multiple uptrend lines serving as technical cushions along with 3/25 and 3/26 lows.  Additionally, the highly psychological .90 level could serve as a solid technical cushion once again should it be tested.

Price: .9153
Resistances: .9163, .9176, .9185, .9199, .9214, .9230
Supports: .9130, .9118, .9106, .9087, .9073, .9054, .9031
Psychological: .90, .91, March Lows and Highs

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