Dollar’s selloff picked up again as year end approaches. While US stocks took a breath overnight, Asia markets ex-Japan is enjoying some solid buying for now. While Euro is strong against Dollar, it’s mixed against other European majors. Meanwhile, Canadian Dollar is clearly lagging behind Aussie and Kiwi in the current risk-on buying. Gold and oil remain range bound too.
Technically, EUR/USD’s break of 1.2272 resistance confirms up trend resumption. AUD/USD is not far behind in breaking 0.7639 resistance. One focus is on when USD/CHF would break through 0.8822 support to resumes down trend too. Another focus in the developments in USD/JPY, which suggests that near term recovery from 102.87 has completed. We might see a test on this low again soon…maybe next year.
In Asia, currently, Nikkei is down -0.57%. Hong Kong HSI is up 1.47%. China Shanghai SSE is up 0.80%. Singapore Strait Times is up 0.45%. Japan 10-year JGB yield is down -0.0032 at 0.023. Overnight, DOW dropped -0.22%. S&P 500 dropped -0.22%. NASDAQ dropped -0.38%. 10-year yield rose 0.002 to 0.935.
NZD/USD upside breakout, targets 0.74/75 next
Following broad based selloff in Dollar in Asian session, NZD/USD finally breaks 0.7171 short term top. The development suggests resumption of whole up trend from 0.5469. Outlook will now stay bullish as long as 0.7002 support holds. Next target would be 100% projection of 0.5920 to 0.6797 from 0.6589 at 0.7466.
The real test to the up trend would be found in 0.7557 long term cluster resistance. That coincide with 61.8% retracement of 0.8835 (2014 high) to 0.5469 at 0.7549. We’d look for loss of momentum approaching this level, to bring a sizeable medium term correction. That’s something for next year, anyway.
AUD/CAD up trend continues as CAD underperforms
Canadian Dollar has been under performing other commodity currencies in the current risk-on markets. AUD/CAD’s up trend is continuing this week, despite relatively weak upside momentum. Outlook will stay bullish as long as 0.9586 minor support holds, nonetheless. Rise from 0.8066 should target 38.2% projection of 0.8066 to 0.9696 from 0.9247 at 0.9870 next.
Decisive break there could bring some upside acceleration to 61.8% projection at 1.0254. This level coincides with a structural resistance at 1.0241, part of the multiyear down trend from 1.0784 (2012 high). Reactions from there could decide how powerful the current long term up trend would evolve into.