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Aussie testing 0.78 handle as a resistance

Friday, Apr 24 2015
It is a steadier Friday's session for Aussie as there are no major data releases from Australia, however, currency was pushed once again to 0.78 handle at the European opening.The Australian dollar’s gains will be limited because of medium term weakness in commodity prices and expectations of a Reserve Bank interest rate cut in May. The Australian dollar (AUD) is forecast to find short-term strength as the follow-through from the weekend announcement of Chinese financial stimulus is felt. The Aussie has found strength over recent sessions after Chinese authorities announced they would cut reserve ratios for their banks in an effort to stimulate lending.
 
The new efforts to boost the economy of Australia’s largest export market will certainly provide some Aussie support in the near-term; but it is argued that it will still fall to Australia’s own central bank to pick up the slack and cut rates further. Such a cut to interest rates will undermine the AUD in coming months and leave those hoping for a stronger domestic currency wishing they had acted sooner.
 
Aussie is currently being traded at 0.78 handle. Pair is likely to find support around 0.7750 area and resistance above 0.7840 area. Later today, in the US session, Durable Goods Orders figures are scheduled for a release.
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