THE Aussie dollar was extremely volatile in the past month as markets suffered from a bout of volatility. Sterling-Aussie was particularly volatile, and after a break out above A$1.7000, the pound kept getting stronger until it hit the A$1.8000 mark. At this point the pound faltered and headed back toward A$1.7000. However, the Aussie hasn’t managed to sustain any serious strength against sterling in recent weeks and this is starting to look like a good support level. If sterling drops back close to this level, then it could be a buying opportunity for sterling bulls. Capital Spreads quotes a price of A$1.7192-A$1.7206 for sterling-Aussie dollar.
Tuesday’s UK inflation data came in slightly softer than expected and the pound has slipped back against both the euro and the US dollar as a result. However the levels remain fairly high, keeping alive the possibility of further sterling gains, especially if the markets are cheered by the Budget that will be announced next week. The key level to look out for on euro-sterling remains at the £0.8400 breakout level, which should continue to thwart any further gains for the single currency. Look to sell euros on rallies towards £0.8400 for a move towards £0.8170. CMC Markets offers a spread of £0.8322-£0.8324.
Could it be that the markets are getting bored by the Eurozone’s debt crisis? It certainly seems as though they are increasingly oblivious to the problems that continue to afflict the economic bloc. Despite Moody’s downgrade of Greek debt at the start of the week, euro-US dollar is eyeing up fresh highs for the month. But has the euro’s sell-off now gone far enough? The current IG Index price for the currency pair is $1.2326-$1.2328.
The dollar is having trouble gaining strength against the yen, although Japanese corporates have been selling their currency. They seem to think that that the ¥92-¥93 mark is a good level to sell at. There does appear to be good support around the ¥91.00 level, so look to play this range. Spread Co offers a spread on US dollar-yen of ¥91.24-¥91.27.