Aussie Dollar Ready to Roll Lower

The Australian Dollar is under pressureovernight. A new main top has beenformed at 1.0200, setting up a possible retracement to 1.0033 to .9993.Yesterday’s interest rate hike by China’s central bank is expected toslow down a heated up economy.

TheAustralian Dollar is under pressure overnight. A new main top has been formed at 1.0200, setting up a possibleretracement to 1.0033 to .9993. Yesterday’s interest rate hike by China’scentral bank is expected to slow down a heated up economy. This may lead to aslowdown in demand for Australian goods and services. Traders are expected tolighten up long positions, driving the Aussie into the retracement zone overthe near-term.

The Euro isat an important transition zone. The wind was taken out of the rally last weekwhen the European Central Bank failed to acknowledge an inflationary problem.Rising U.S.interest rates are also pressuring the Euro.

Last weekthe main trend turned down on the daily chart when 1.3570 was broken. There wasno acceleration to the downside which usually means there is going to be ashort-term retracement to the upside. This makes 1.3684 to 1.3726 a likelytarget. If sellers show up in this zone then look for the start of a new legdown. Expectations are for the Euro to eventually weaken to 1.3367 to 1.3250.

The BritishPound remains under pressure ahead of Thursday’s Bank of England policystatement. The BoE is expected to keep interest rates unchanged. Discussionsare likely to continue to highlight inflation and the effects of austeritymeasures on economic growth.

Technically,downside pressure is expected to push the Sterlingdown to 1.5811 over the near term.

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