Aussie surges on RBA minutes, swissie pressured

The Australian dollar is the top performer against the greenback in early North American trade, advancing more than 0.50%. Overnight the RBA released minutes from the September 6th meeting where policy makers left rates unchanged at 4.75%. The minutes cited that, “members considered that the current setting of monetary policy left the board well placed to respond to evolving global and domestic economic conditions.” The remarks supported the aussie which has been battered down by interest rate expectations, with Credit Suisse overnight swaps now factoring in 143 basis points in cuts, down from 150+ points just yesterday. The advance may be short lived however as concerns over global growth prospects continue to take root with the IMF lowering their growth projections this morning for the US and global growth in the coming months. As noted in yesterday’s Scalp Report, topside resistance for the aussie stands at the 38.2% Fibonacci extension taken from the August 1st and September 1st crests at 1.0315, backed by 1.0370 and 1.0420. Interim support targets rest at the 50% extension at 1.0180 with subsequent floors seen at 1.0110 and the 61.8% extension at 1.0045.

Key Levels/Indicators

Level/Indicator

Level

100-Day SMA

1.0606

50-Day SMA

1.0570

20-Day SMA

1.0485

2011 AUD High

1.1079

The Swiss franc was the worst performing major against the dollar, sliding more than 0.64% in early US trade. Speculation that the SNB may tighten its target on the euro to limit the currency’s strength continues to weigh on the franc. As it stands, the central bank has cited that it will not tolerate the EUR/CHF exchange rate below the 1.20 level. As rumors that officials may target an even higher rate persist, the swissie is likely to remain under pressure, noting interim resistance for the USD/CHF pair at the 0.89-figure, the 23.6% Fibonacci extension taken from the September 2nd and 15th troughs at 0.8930, and the 0.90-figure. Support rests at the 0.88-figure, backed closely by 0.8760 and the 0.87-handle.

Key Levels/Indicators

Level/Indicator

Level

100-Day SMA

0.8317

50-Day SMA

0.8097

20-Day SMA

0.8419

2011 CHF High

0.7079

Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.

Twitter: @MBForex
WEB:
www.fxcm.com

About the Author
Michael Boutros Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.
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