The Australian dollar enjoyed a better mood in Europe and jumped higher, finally crossing the important 0.9660 line. This line provided strong support in recent weeks and turned into strong resistance in recent days.
Earlier in the day, Australian GDP disappointed with a modest rise of 0.2% in Q3, while expectations stood on 0.5%. Also the figure for Q2 was revised to the downside, from 1.2% to 1.1%. But the Aussie only fell to the 0.9540 support level – it didn’t go lower.
And then good news came along – soon after the GDP release, Chinese Manufacturing PMI was released and it was slightly better than expected – 55.2 instead of 54.8. The Aussie bounced quickly. This shows over and over again how the Australian dollar depends on China. But, it’s important to note that it wasn’t enough to send AUD/USD above resistance.
The improved mood in Europe made the difference. ECB president Jean-Claude Trichet hinted that bond buying would resume. Yields on Euro-zone peripherals finally fell after reaching record highs, the Euro rose, stocks rose, and the Aussie finally cut through.
The next hurdle is 0.9724, which was the bottom border of a range between 0.9724 and 0.9863. For more technical levels and analysis, see the AUD/USD forecast.
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