Lawrence Villamar

The Australian Dollar advanced yesterday managing to hold on its speculator gains from overnight Tuesday.

The Aussie has been pushed up to crucial resistance at 1.0400 and traders will be looking for new shorting opportunities up at this level. The 1.0400 level is the neckline of the double-top formation and the market will view this level as critical. Traders are likely to favour the downside until we see a clear break of 1.0400.

Global financial markets have experienced a wild 24 hours with the Australian dollar right in the thick of it

The release of the FOMC minutes confirmed that US interest rates are unlikely to change anytime soon. The Fed committed to keeping interest rates near zero for at least another two years and in a divided decision the central bank also signalled it was prepared to do more if necessary to spur growth over the midterm.

Over the years the Australian dollar has had a habit of going up by the stairs and coming back down via the lift. I

The Aussie has now broken below 1.0400 and this sets up further bearish moves. Over the medium term, we could see a move back to 0.9800. A break below 1.0100 should be the trigger for further selling, while any move back to 1.0300 is also a selling opportunity.

The AUD has borne the brunt of risk aversion trading, falling below USD1.0200 overnight as US markets digested the region’s credit downgrade.

Global equity and commodity prices plunged on Monday as fears of recessions across the Northern Hemisphere caused panic selling by investors. Despite the US credit rating downgrade, the US dollar index and US bond prices rose.

It was another volatile local session marked by heavy two-trade on Monday which saw the Aussie gyrate between a low of 1.0330 and a high of 1.0440.

U.S. stocks tumbled deeper into correction territory in a Monday rout that sent the Dow Jones Industrial Average plunging to the biggest point drop since Dec. 1, 2008.

The Aussie has seen some small losses in early morning trade as risk instruments were sharply sold lower. Looking at the daily chart above, we can see the Aussie is at a crucial juncture above 1.0370. A break of 1.0370 sets up further losses, but don’t be surprised if we see a bounce from these levels. Stops under 1.0350 provide good risk/return for aggressive traders.

We anticipate a very volatile environment in the next several days after equity markets fluctuated wildly on Friday and the first downgrade of US sovereign debt from AAA to AA- was done by S & P since debt ratings began in 1917 after US markets closed.

Late on Friday night US time, ratings agency Standard and Poor´s downgraded the long-term credit rating of the United States from AAA to AA+.

After a tumultuous end to last week the Aussie opens on Monday at 1.0400 as investors continue to digest news of the United States downgrade by S & P on Saturday morning local time from AAA to AA+.

Standard & Poor's took the unprecedented step of downgrading the U.S. government's "AAA" sovereign credit rating Friday in a move that could send shock waves through global financial markets and potentially undermine world economic growth. In a press release, S&P, cut its top-notch long-term credit rating for the U.S. Treasury's debt to AA+ with a negative outlook.

The Aussie saw an extreme move lower overnight as markets sold out of risk instruments. We could see a small bounce from 1.0400 which is an absolutely crucial level for the Aussie dollar, but traders will continue to focus on the downside. A break of 1.0400 could set up a medium-term move to below 0.9800.

The AUD is significantly lower this morning as risk aversion trading takes centre stage.

US jobless claims (new claims for unemployment insurance) fell by 1,000 to 400,000 in the latest week. Economists had tipped a reading around 405,000. The four-week average has fallen to the lowest levels in over four months.

The Australian dollar has sunk to 5 week lows as risk aversion grappled the markets on Thursday, extending its weekly loss to 5.3%. In a day where there was no other movement than to the downside, the local session saw a move from 1.0770 to 1.0650 and close to another 2 cents were erased over the course of the evening.

U.S. stocks plunged in the biggest selloff since the financial crisis, driving the Dow Jones Industrial Average down more than 500 points, as investors appeared to lose faith in the ability of the world's policy makers to revive the global economy and stave off a rolling debt crisis in Europe

The Aussie has found some support at 1.0700 and traders will be watching the levels carefully in the near term. Resistance is seen at 1.0800. Traders will be looking to play the range until we see a decisive break in either direction.

The Australian Dollar has opened trading around the 1.0750 level after trading lower in the overnight session.

Blue-chip stocks reversed a steep morning drop to snap an eight-day losing streak. In a volatile session, the Dow Jones Industrial Average squeezed out a gain of 29.82 points, or 0.25%, to finish at 11896.44.

The US ADP survey of private payrolls showed that employers added 114,000 jobs in July, above forecasts for a 100,000 gain. The ISM services index eased from 53.3 to 52.7 in July, below expectations for a result near 53.6.

The Australian share market fell to its lowest point in almost a year on Wednesday as investors fretted over the weak US economy. At the close, the benchmark S&P/ASX200 index had fallen 100.8 points, or 2.27 per cent, to 4,332.8 points while the broader All Ordinaries index was down 102 points, or 2.26 per cent, at 4,408.3 points.

By late yesterday morning the Australian dollar had fallen from opening levels of 1.0780 to 1.0680, the lowest level in two weeks. While already under pressure as investors turn away from risky assets, another incentive to sell was provided by local retail sales and trade balance figures.

The Australian Dollar has fallen another US cent overnight after the Reserve Bank of Australia kept the cash rates on hold yesterday and the release of weak economic data out of the US.

The US Senate has passed the bill to cut spending and raise the debt ceiling. President Obama has signed the debt bill into law.

Yesterday’s break below 1.0910 produced a perfect double-top formation and the natural target for such a move is back to 1.0740. The market has paused around this level and in the near term we could see a move back toward 1.0800. Traders will be watching the price action carefully at this level for an indication of the Aussie’s future direction.