Opened in Asia at $0.9974 as risk appetite recovered
City Index February 1, 2011 8:02 PM
<p>AUD/USD Range: 0.9966 – 1.0044 Support: 0.9980 Resistance: 1.0070 Opened in Asia at $0.9974 as risk appetite recovered with no further escalations in Egypt ahead […]</p>
Opened in Asia at $0.9974 as risk appetite recovered with no further escalations in Egypt ahead of today’s big “Million Man rally”and rose back through parity to $1.0015 ahead of the unchanged rate decision from the RBA. Aussie slipped slightly after the announcement to $0.9980 before buyers returned and took the pair through parity again tripping stops positioned at $1.0025 to a high of $1.0039. Resistance ahead lies at $1.0077 Jan19 high and $1.0124 the Jan4 high. Euro-aussie slipped from earlier highs of A$1.3763 to A$1.3675 as the aussie rallied after the RBA, with sterling-aussie tracking the move falling from a high of A$1.6113 to A$1.5994.
The calmer situation in Egypt continued to see flows back into risk, in turn taking rate up from an early Asian low of $1.3690 to $1.3725. Rate dipped back but fresh demand placed ahead of $1.3700 kept rate buoyed and allowed it to step its way up to a session high of $1.3731. Continued demand into early Europe has extended this recovery to $1.3738, just holding shy of Monday’s high at $1.3740. A break above this level to open a retest of recent highs at $1.3750, a break to expose the Nov 22 high at $1.3786, where stronger resistance is suggested to reside. The Egypt situation continues to bubble away in the background with data focus turning to eurozone manufacturing PMI’s. German and EMU employment reports also due.
Rate initially marked session lows at $1.6010 into early Asian dealing, with risk appetite allowing rate to recover. This recovery gained a boost on release of NIESR data, forecasting a UK interest rate for the end of 2011 at 1.25%. Rate spiked through Monday’s high to $1.6070, helped by stops tripped on the move above $1.6060. Rate dipped back to $1.6040 only to meet fresh demand that stepped rate up to highs of $1.6080. Traders highlight the $1.6075 level as being the 76.4% retrace of $1.6300/1.5345. Rate currently trades around $1.6065, with corrective pullbacks so far holding firm.