It’s not just Ontario and Quebec that is rocking and rolling today it is AUD/USD as well. Oz was hit this morning after PM Rudd announced he was being challenged for the leadership of his party and on the weakness we saw late this morning in EUR/USD.
AUD recovered and made new highs for the New York session after the Fed amid analyst chatter that the Fed may have to resort to more quantitative ease to revive a weakening economy and put a floor under low inflation. That seems a bit premature but it would not be the first time that the market has jumped to a hasty conclusion…
EUR/USD ripped as high as 0.879 in one of those “rip you lungs out” rallies that squeeze the bejezus out of the fresh shorts.
0.8665/70 is shaping up as important support near-term while A sustained push through trendline resistance off the 0.8860 high on Monday will target 0.8805 initially. Ahead of the leadership vote in Australia tomorrow, we’d expect ranges to prevail near-term, however. AUD trades now at 0.8732.
