By: Bastian Rubben
The US indices made the aggressive correction that the market has anticipated, but this does not necessary mean that we are going to see additional declines. The investors are waiting for the employment data that will publish on Friday, as today prior data is published by the ADP. On the technical aspect, there is a gap that was opened in the S&P 500 last month and the index might slide to the closing level around 1325 points.
I mentioned yesterday that in spite the fact that the GBP & EUR showed an impressive strength on Monday, they would not be able to rise if the shares continues losing altitude, and eventually they crashed against the USD. On the same weight, the USD will lose power if the stocks resume rising.
I am watching the Australian dollar after the interest rate announcement yesterday, in which the RBA kept the interest level at 4.25%. This arbitrage between the interest rates of Australia and other developed countries should support the Aussie but right now, it looks like it started correcting some of the recent rally. The pair AUD/USD broke an important support at 1.06 and if it keeps sliding, the price might fall to the next strong support at 1.04.
The Aussie looks weaker against the Euro as well, and though both currencies are weakening against the USD, the EUR is relatively stronger. The pair has been moving in channel in the recent months and it reached the upper boundary of the channel at 1.248, as a successful break-up this time might take the pair above 1.26. However, if it fails, it might fall back to the support at 1.22
