
The Australian dollar against
the US dollar (AUDUSD) or Aussie, took quite a tumble overnight (GMT). The
lower than expected US Non Farm Payrolls report had given the pair a further
boost, to enhance the growth is has shown since after the Australian Federal
elections.
The given reason for this
drop is that Chinese banks have increased their levels of write-offs
three-fold, and anything that bodes ill for the Chinese economy is also
perceived to be bad for Australia
and, consequently, its currency. To complicate matters, Australian inflation
figures, releases yesterday, show a larger-than expected rise, which would be expected
to encourage the Reserve Bank (RBA) to raise the cash rate, thereby tending to
increase the value of the Aussie, rather than reduce it.
Could the reason for the drop
be more technical than fundamental? As pointed out here, the Aussie has started
to joust with the 200 period Simple Moving Average (SMA) on the daily chart. There
is also a significant resistance level at 0.97400.
Thanks for this nice analysis.
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