23 February, 2012
Australia Politics have their impact, but for how long ?
AUDUSD 1.0620
This market is heavier than may have otherwise have been expected at this phase of the economic cycle, but then again as I have been saying for quite some time, while the external sector is fantastic, the domestic scene is a shambles.
Most traders regardless of whether they think a change of leadership for the Prime Ministers job matters or not, will at the least be concerned it may well matter to other market participants. Therefore caution on the Australian dollar will be the name of the game over the next several days.
While exporters can be expected, and should scoop up all the Australian dollars they can on every dip, we may see global investors stand back for the moment.
There is good buying interest around that 1.0605 level, but it has to be said that there may be short term risk to 1.0520, perhaps even 1.0460 as an outside chance. The market remains immediately under pressure while resistance at 1.0670 contains, and clearly so on the day while below 1.0635. Major support 1.0605, then minor 1.0585, and strong a again at 1.0520. Any move above 1.0670 1.0705 would suggest the selling had evaporated and the absolute low of this consolidation period had been seen.
Continue to favour the upside in a long term sense, though respecting some immediate downside pressure due to political uncertainty, which is likely to last for 3-5 trading days.
EURUSD 1.3245
It is a very nice strong consolidation period we are in at the moment. The boundaries are 1.3150 1.3320 on the wide, and more probably 1.3215 1.3285. Immediately we are in an extremely tight range of 1.3130 1.3165, with a lot of energy building here, and favour an upside break. Once we breach resistance at 1.3285 1.3320, the market will run very quickly to significantly higher levels. Targets short term would be 1.3600 1.3900.
Clifford Bennett
AUDUSD 1.0620
This market is heavier than may have otherwise have been expected at this phase of the economic cycle, but then again as I have been saying for quite some time, while the external sector is fantastic, the domestic scene is a shambles.
Most traders regardless of whether they think a change of leadership for the Prime Ministers job matters or not, will at the least be concerned it may well matter to other market participants. Therefore caution on the Australian dollar will be the name of the game over the next several days.
While exporters can be expected, and should scoop up all the Australian dollars they can on every dip, we may see global investors stand back for the moment.
There is good buying interest around that 1.0605 level, but it has to be said that there may be short term risk to 1.0520, perhaps even 1.0460 as an outside chance. The market remains immediately under pressure while resistance at 1.0670 contains, and clearly so on the day while below 1.0635. Major support 1.0605, then minor 1.0585, and strong a again at 1.0520. Any move above 1.0670 1.0705 would suggest the selling had evaporated and the absolute low of this consolidation period had been seen.
Continue to favour the upside in a long term sense, though respecting some immediate downside pressure due to political uncertainty, which is likely to last for 3-5 trading days.
EURUSD 1.3245
It is a very nice strong consolidation period we are in at the moment. The boundaries are 1.3150 1.3320 on the wide, and more probably 1.3215 1.3285. Immediately we are in an extremely tight range of 1.3130 1.3165, with a lot of energy building here, and favour an upside break. Once we breach resistance at 1.3285 1.3320, the market will run very quickly to significantly higher levels. Targets short term would be 1.3600 1.3900.
Clifford Bennett
Clifford Bennett
Chief Economist
White Crane Group
Sydney, Australia.
+61 (0) 423 950 427
clifford@whitecranegroup.com.au
www.whitecranegroup.com.au
