General profit taking pushes the Aussie lower

The Aussie, along with almost all other currencies, received a battering as traders took profit against the US Dollar overnight.

After closing around the 0.7670 level the Aussie began a slide in early European trade before a rally saw it push to a high of 0.7696. Unable to break the increasing resistance at 0.7700 the Aussie started to slide quickly and didn’t really stop until it reached support at 0.7620. The apparent reason for this move was a general sell off of currencies against the US Dollar, as traders take profit ahead of this weeks US interest rate announcement and GDP data. The Aussie spent most of the US trading session down around 0.7620 and only after opening here this morning has it shown any inclination to regain any of its losses.

Due to the fact that the profit taking overnight was on all currencies against the greenback, most of our cross rates are at the same levels as yesterday. In general the gain we have made on our cross rates of later are susceptible to any continued profit taking. Once the market has finished with direct greenback related profits, traders are likely to look to other profit opportunities.

With US Q1 GDP figures out tonight the market will be looking for any seasonal or other adjustments to the three months of data already known. Any major adjustments will see traders react. The announcement tomorrow night on the US interest rate will remain the focus of traders and dictate the market, as long as the data tonight in benign.

Onshore today should see the Aussie continue the battle it began onshore this morning and look to head back towards 0.7650.