Optimistic Traders Driving Australian Dollar Higher
The Pattern, Price & Time Report | Nov 20, 2012 12:44AM ET
The December Australian Dollar rebounded overnight from last week’s sharp sell-off on Monday with investors driven by signs of progress in discussions to resolve the fiscal logjam in the U.S. Additionally, there was also optimism in Europe where officials appear to be closer to releasing delayed aid for Greece.
U.S.lawmaker comments over the weekend are leading investors to believe that a compromise was possible in talks to avert the $600 billion “fiscal cliff”, which threatens to trigger a recession in early 2013.
A little clarity is going a long way as investors appear to see the light at the end of the tunnel and are pricing in a possible compromise.
Adding further to the positive shift in investor sentiment is the start of discussions by European officials to resolve the funding request by Greece. The meeting which begins today, Tuesday, is expected to conclude with Greece receiving a two-year funding deal. Additional terms would include the postponement of any longer-term solution until after a September 2013 German general election.
Technically, the December Australian Dollar is in a downtrend on the daily chart, but Friday’s reversal bottom is generating enough follow-through momentum on Monday to fuel a possible challenge of a pair of tops at 1.0446 and 1.0432. Besides these two levels, a slow-moving downtrending Gann angle drops in at 1.0422 to provide additional resistance.
Late last week the market tested the 50% level created by the 1.0089 to 1.0446 range at 1.0268. The actual bottom was 1.0263. The new short-term range is 1.0263 to 1.0432. Monday’s surge triggered a test of this zone with the upside momentum threatening to take it out with conviction.
If demand for higher yielding assets continues, then look for the December Australian Dollar to grind higher throughout the session.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.