- Aussie slightly bid after government sees smaller deficit for 2016/17 than previously forecasted in May.
- In its latest report, Fitch has said the budget outlook is still consistent with AAA ratings, despite slight deterioration.
- S&P also said that Australia budget update has no immediate rating impact, but adds further pressure.
- S&P said they are still pessimistic about Australia meeting targets by 2021.
- AUD/USD bounced off major trend trendline support at 0.7265, but major trend is still lower.
- The pair was rejected at highs at 0.7312 on the day and has slipped back to currently trade at 0.7291.
- Technical studies are bearish and we see scope for further downside.
- Support levels - 0.7280 (78.6% Fib), 0.7260 (trendline), 0.7217 (88.6% Fib)
- Resistance levels - 0.73, 0.7340 (trendline), 0.7371 (5-DMA), 0.74
Recommendation: Good to sell rallies around 0.73, SL: 0.7350, TP: 0.7260/ 0.7220/ 0.72
FxWirePro's Hourly AUD Spot Index was at -142.464 (Highly bearish), while Hourly USD Spot Index was at 88.1808 (Bullish) at 0520 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
