The Australian Dollar is under pressure overnight. A new main top has been formed at 1.0200, setting up a possible retracement to 1.0033 to .9993. Yesterday’s interest rate hike by China’s central bank is expected to slow down a heated up economy. This may lead to a slowdown in demand for Australian goods and services.
After building a support base throughout the day while reacting to the sideways trade in the equity markets, September Treasury Bonds mounted a strong rally late in the session, indicating that they may be poised to launch the start of another leg higher.
The EUR USD posted a closing price reversal bottom after positive comments from Greek officials encouraged weak shorts to lighten up their positions. After touching a new low for the year overnight, the EUR USD turned around as the lack of fresh selling pressure scared some of the weaker shorts out of the market.
The strong recovery in the U.S. Dollar late in the week and the inability to break it sharply lower could be a sign that a short-covering rally is imminent. Rumors the Fed may begin to raise interest rates earlier than expected, a poor U.K. economy and fear of intervention all helped boost the Dollar on Friday.
