The Aussie has been very well bid ever since the inexplicable move down to
0.9740 in very early Sydney yesterday. Corporate buying was followed up by US
interests in thin conditions due to the US holiday, eventually reaching parity
before settling back just under the highs, late in the day.
The momentum indicators continue to point higher for the time being and we
are approaching the neckline of the head shoulder formation that I have been
monitoring for a while. We need to stay under 1.0040 if we are to maintain the
view that the Aud will eventually see levels in the low 0.90‘s area. Above here
would cause a reassessment and if we see 1.0070, I think it likely there will be
some decent fresh buying, as resistance levels are taken out. For today use
0.9940/1.0040 as a guide.
US Equities have finished up 3% with the S&P having more or less reached the
1200 target. We could well see this march on to 1220/1240 but major
headwinds could lie ahead and if nothing concrete comes out of the
German/French banking deal, we could be in for a sharp turnaround. As long as
equities stay bid though, then so will the AUD.
NAB business Conditions today.
