Asian Open Traders Are Their Least Bullish On AUD This Year
Friday’s weekly COT report (Commitment of Traders) revealed net-long exposure had fallen to its lowest level since December for the Australian dollar.
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AUD/USD
Range: 0.9867 – 0.9995
Support: 0.9820
Resistance: 1.0000
The Aussie Dollar soared after the RBA unexpectedly raised interest rates for the first time in 6 months, and hinted that further tightening is not far away. RBA governor Glen Stevens said the economy was now subject to a “large expansionary shock” on the back of the highest terms of trade since the early 1950s. Stevens concluded that the “risk of inflation rising over the medium (has) shifted to the point where an early, modest tightening of monetary policy was prudent”. His rhetoric suggested that there will be more to come in the near future.
EUR/USD
Range: 1.3882 – 1.3946
Support: 1.3865
Resistance: 1.4010
Beside the movements in the Aussie crosses, after the unexpected rate increase in Australia, the FX markets seem relatively quiet this morning. The market seems to be preparing itself for risk events such as US midterm legislation election, the Fed monetary policy meeting and the NFP’s taking place this week. EURUSD was dragged 30 pips higher on the jump in AUDUSD, currently trading around the 1.3935 area, slightly above its opening price. The final revision of German and Euro zone manufacturing PMI are due just before 9am this morning.
GBP/USD
Range: 1.6041 – 1.6076
Support: 1.6005
Resistance: 1.6105
Cable seems to be stuck! The currency has appreciated against its European and American neighbours, but the UK’s financial and economic health are under considerable scrutiny. The speculation surrounding policy is keeping the currency anchored. With the BoE expected to take a neutral outlook on future monetary policy, this could be considered relatively bullish given the very dovish outlook of the US.
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