The Australian dollar continues to defy the odds and after dropping back down below 0.72 for a few days, it has surged higher. As I type this on Friday afternoon, it is edging closer to 0.7390 which is the high from early December.
The ASX200 has edged a little higher and remains above the key 5000 level.
On Tuesday the RBA decided to leave the Australian official cash rate at 2% where it has been since May last year. In the release, Governor Glenn Stevens said, “In Australia, the available information suggests that the expansion in the non-mining parts of the economy strengthened during 2015 despite the contraction in spending in mining investment.”
Article – RBA Sits at 2%
Over the last month or so the Australian dollar has crept higher to the point of moving back through the key levels of 0.70 and 0.72. It has easily cleared resistance around 0.73 and is currently testing resistance around 0.7390 from last year.
If it fails here and reverses, look for the sellers to jump in and potentially move it back to the key 0.72 level again quite quickly.
The ASX200 has enjoyed a positive week moving through the key 5000 level and reaching its highest level since 7 February.
Image from MetaStock
The recent trough around 4850 was higher than the previous trough around 4700 therefore the medium term trend has theoretically reversed.
The volatility of the index has eased a little this week, although it remains above 1.5% which is where it has been since 8 January. Volatility is good in individual stocks, currencies etc, however not necessarily in a broad-brush market index.
- S&P/ASX 200 Sentiment Higher as Index Rallies to Near 5000
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