Fell back yesterday after Tuesday’s strong rally and the initial euphoria following the ECB LTRO auctions, which saw a European high of $1.0219. Rising peripheral bond yields in Italy and Spain allied to strong EUR/USD macro supply sent risk clattering off which continued into the NY session and pushed AUD/USD down to $1.0051. A late affirmation of Australia’s AAA rating from Moody’s lifted the pair back up with high’s this morning of $1.0108, before Asian bourses led by the Shanghai composite headed lower. Aussie slumped to the low 1.0060’s (1.0061 low) where continuous demand later led a bounce back up through $1.0090 as the Shanghai composite attempted to recover earlier losses. Bids are now seen towards $1.0055/60 (20 day MA $1.0058) and there are option strikes today at $1.0050, with offers up at $1.0105/10 and $1.0210/20. AUD/JPY drifted down from Y78.89 to Y78.56. AUD/NZD remained tightly rangebound through NZ$1.3099-1.3137.
EasyForexNews Research Team