Dollar Continues To Gain Traction Against Major Counterparts
US dollar continued to surge higher against most major currencies and might further head higher in the near term.
In Australia, AiG performance of the Mfg Index released by the Australian Industry Group came in at 46.9, compared with the last reading of 50.1.
In Japan, the Nomura/JMMA Manufacturing PMI was released which came in at 52, compared with the preceding reading of 52.
There are several risk events lined up during the London session which might cause moves in the Euro and the British pound.
EURUSD might continue to move lower in the short term and looks set for a test of 1.1850.
GBPUSD also moved lower and looks like might head towards the 1.5100 level.
The New Zealand weakened a lot against the US dollar and traded below the 0.7700 level. There were a couple of important support trend line on the hourly chart, which were breached and paved the way for more downside in the near term. Moreover, the NZDUSD pair also traded below the 100 and 200 hourly moving averages, which is a strong bearish sign. The 0.7700 support area was a major support for the pair, which was also pierced and might act as a resistance in the near term. Furthermore, if the pair retraces from the current levels, then the broken trend line might also act as a hurdle for buyers. The most important resistance is around the 200 hour moving average.
Intraday Support Level – 0.7650
Intraday Resistance Level – 0.7700
Overall, as long as the pair is below the 200 MA it might continue trading lower.
A break above the mentioned MA could take the pair towards the 0.7800 level.
On the downside, recent low might act as a support in the near term, but if sellers manage to break it then a move towards the 0.7620 area is also possible. We need to see how the pair reacts when it reaches there.
The US dollar not only traded higher not only against the Euro and the British pound, but also moved higher against the Canadian dollar. There was a bearish trend line formed on the hourly chart of the USDCAD pair, which was also broken recently. The USDCAD pair surged sharply higher and broke the 1.1700 resistance area to trade towards the 1.1800. There is more upside left in USDCAD and it might head towards the 1.1850 level. Most indicators are lining up for more gains in the near term and signaling the fact that the US dollar buyers are here to stay.
Intraday Support Level – 1.1720
Intraday Resistance Level – 1.1840
Buying dips around the 1.1720 level look like a good option.
A break below the same would call for losses moving ahead.
There is a chance of a correction in the USDCAD pair, but that can only be seen as a buying opportunity. There is more upside in USDCAD and likely that a move towards the 1.1850 level is possible in the short term.
New Zealand dollar traded lower this past week after solid gains against the US dollar, but found support around and important area which means there is a chance of recovery in the near term.
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