14 Nov 2013
AUD well off day highs as RBA talks $A down
FXstreet.com (Barcelona) - The AUD/USD, after driven to near its weekly highs at 0.9385, has seen an impulsive retracement in the last hour of trading, with the move being attributed to comments made by Reserve Bank of Australia board member Heather Ridout on Thursday, saying the currency will damage the economy if the strength persists.
RBA board member headlines weight on the Aussie
"As we transition to a more diversified economic base, the dollar where it is at the moment is very challenging and it is turbo-charging a very high cost structure in Australia and putting a lot of stress on things," Ms. Ridout, a former head of the Australian Industry Group said, quoted by the Wall Street Journal.
The WSJ adds, quoting Mr. Ridout, that sustained strength for an extended period may cause a restructuring of the Australian economy "of quite substantial magnitude." Ridout had no problem in admitting some clearly biased comments in favout of a weaker Aussie, saying "tapering by the Fed is a very important development; very important for the Aussie potentially."
AUD/USD technicals tentatively constructive
While the underlying trend continues to point to further weakness, there might be the possibility that the Australian Dollar sees bids returning on intraday dips, mostly on USD bearish sentiment.
On the upside, there seems to be some room for a stronger recovery to play out following the impulsive rejection off lows. To add credence to the bullish view, a break and hold above 0.9370 is necessary, followed by the break of 0.94 (50% fib retrac 0.9550-0.9260), which may allow 0.9430 key daily resistance.
On the flip side, sellers should now be able to regain 0.9330 support (top of broken bear kumo H1 chart) to open up doors towards 0.93/0.9310 next keey support ahead of retest of bear trend lows.
RBA board member headlines weight on the Aussie
"As we transition to a more diversified economic base, the dollar where it is at the moment is very challenging and it is turbo-charging a very high cost structure in Australia and putting a lot of stress on things," Ms. Ridout, a former head of the Australian Industry Group said, quoted by the Wall Street Journal.
The WSJ adds, quoting Mr. Ridout, that sustained strength for an extended period may cause a restructuring of the Australian economy "of quite substantial magnitude." Ridout had no problem in admitting some clearly biased comments in favout of a weaker Aussie, saying "tapering by the Fed is a very important development; very important for the Aussie potentially."
AUD/USD technicals tentatively constructive
While the underlying trend continues to point to further weakness, there might be the possibility that the Australian Dollar sees bids returning on intraday dips, mostly on USD bearish sentiment.
On the upside, there seems to be some room for a stronger recovery to play out following the impulsive rejection off lows. To add credence to the bullish view, a break and hold above 0.9370 is necessary, followed by the break of 0.94 (50% fib retrac 0.9550-0.9260), which may allow 0.9430 key daily resistance.
On the flip side, sellers should now be able to regain 0.9330 support (top of broken bear kumo H1 chart) to open up doors towards 0.93/0.9310 next keey support ahead of retest of bear trend lows.