After ending last week with a strong sell-off, the pair finally found some footing today after forming a piercing pattern to create a short term bottom, followed by a pin bar just a few hours ago off a key support and role reversal level at 1.0009. This is after 16hrs of straight buying, so short term there are some buyers underpinning this pair. The Aussie will need to clear the short term resistance at 1.0075 before bringing in new buyers and releasing some of the downside pressure. From here, it should make its way up to 1.0130 before encountering sellers who may wish to form a LH from the recent swing highs at 1.0230 so watch for price action triggers here.
Global Market Commentary:
Stocks as a whole treaded water with modest gains in the US while the Euro fell to its 2week lows vs. the USD, mostly due to a decent rise in the US Home Prices. Keep in mind, most of the US home buying is from foreign investors (read Chinese & Brazilians) so this does not say much about the greenback economy.
Risk was thus on for the day with Gold dropping to $1572 while the DOW gained about 32pts.
The main things to note in Europe are the Pain in Spain with yields increasing, and now Cyprus entering the frey of countries to ask for a bailout (expect others soon - likely Italy if no Eurobonds deal is had). Frau Merkel is putting the kabbash on the shared total debt liability (which is just a plan to make Germany foot the bill for almost everyone in Europe) with her statement amounting to her saying 'Nein' towards this plan. Keep in mind Egan Jones just downgraded Germany from AA- to A+ which does not help the EZ crisis. The longer Merkel continues this mantra of 'Nein', the more tension will be placed on Italy and we shall see if they are next to request a bailout with Italian yields becoming quite untenable.
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