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"Bernanke needs to reassure markets that interest rates are going to remain accommodative and manage rate expectations from moving up too quickly, so in a way he has to be quite dovish."
- Morgan Stanley (based on CNBC)
Pair's Outlook
It does not seem that the interim resistance at 0.9261 poses any threat to the current surge. However, the higher levels, if reached, may not only stop appreciation of the Aussie, but also rekindle the sell-off. The strongest two such resistances we consider to be 0.9384 (2011 low) and 0.9577 (2012 low). Technical indicators, in the meantime, are mixed and support neither a rally nor a dip.
Traders' Sentiment
The Australian Dollar has become the most popular currency not only among the G10, but also among the emerging market currencies. Three out of four positions in AUD crosses are long—a four percentage point jump from a yesterday's figure of 71%. The ratio between the longs and shorts on AUD/USD is unchanged—72% to 28%.
© Dukascopy Bank SA