Let us now take a closer look on the AUDUSD. Looking at its 1-hour chart, the pair indeed gapped down to start this week’s trading. Remember that in my post about the pair (click here), I already mentioned the possibility of such price action. The pair opened weak then rallied for awhile but when the gap was filled it turned around and lost about 125 pips. Recently, the pair broke above the 0.8215 resistance before meeting a wall at the previous support at 0.8288.
Presently, the pair is trading around the 0.8215 support and the short term uptrend line. A break below these levels could send the Aussie down near 0.8100. On the brighter note, the pair could reach at least 0.8364 if and when it is able to clear 0.8285.
On the sentimental side, the Aussie gapped down against the greenback when the Asian market ‘priced-in’ the latest developments in Europe and in the US as of Friday. This currency, though, could get some lift if the Reserve Bank of New Zealand, the RBA’s smaller cousin across the Tasman sea, decides to finally hike their rates tomorrow from 2.50% to 2.75%. This, however, could only give the Kiwi as well as the Aussie some temporary lift as the price-shifting factor remains to be the unfolding event in the euro zone. In a recent poll, about 75% believe that Greece will eventually default on their dues. In case this happens, the euro as well as the other non-dollar currencies like the AUD would lose some bigtime support. Any developments that would signal such would likely weigh on the non-dollar currencies like the Aussie.