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USD Catches its breath, for now

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Forex Market News

Finally some retrace and pullback in the USD.  It all started yesterday with the failure of the RBNZ, disappointing the market with its  inaction or  significant change in outlook. This sent the NZD higher, effectively starting the USD pullback. Throughout the Asian session the EUR tested and took out the option barrier at 1.0500 then started its retrace higher continuing through the European and NY sessions as the market took profits on USD long positions. A lack of data left the market to its own devices, until we got US Retail Sales data for the month, -0.6% v 0.3% expected. Shocking weather last month was partly to blame, however it weighed on US interest rate expectations with US equity markets rallying, aided by the positive results from the US Fed’s capital review of the banking sector. OIL sold off again and looking vulnerable to a test of recent lows with Gold following suit, closing above 1150, but looking to retest last year’s multi year lows at 1130!!

From Yesterday;

NZD They say New Zealand is a long way from the rest of the world! And so certainly is their Monetary Policy stance!!   I didn’t realise that the global economic  powerhouse of NZ was leading global growth!  I love my Kiwi Pinot’s and unfortunately they won’t be getting any cheaper, at this stage!  Yes I was short NZD!  There was still a bit in the Statement for the doves but with no change it rates at this stage, NZD reversed and rallied 100+pips.

AUD Broke the 0.7600 option barrier and tested 0.7550.  Thursday’s unemployment/employment data headlined as expected and the market’s reaction was relatively muted.  AS the EUR drifted lower, so did the AUD testing 0.7575.

The USD’s progress has taken a breather close to its recent highs. That’s it for data this week, however plenty more next week with RBA minutes, BOJ, FOMC, BOE minutes, NZ GDP, SNB possible further rate cut and more!  Where do we re-buy USDs!?! Enjoy the weekend and helmets on for next week!

Data Highlights   – ( Next Week as above))

EUR/USD    –       A healthy retrace overnight, almost 200pips. Traded back above 1.0665, Tuesday’s low, but closed below.  Where do you sell it!

Resistance:        1.0720, 1.0770

Support:             1.0495/00, 1.0220

USD/JPY    –         Frustrating. Still holding support at 120.45 after a bearish engulfing bar, however its almost a low test as well. Trend is higher ! Building base to break higher again for me. Friday with no data………………. Where’s the underlying direction?! FOMC next week.

Resistance:        122.05, 124.15

Support:             120.80, 120.45, 119.45

GBP/USD    –       Pullback? Not got the Sterling! Weak data Wednesday night and Carney comments overnight have put the sword to any rate rises for now. Another substantial seller bar , high test?, and GBP looks extremely vulnerable. Possibly watch for overall market direction on USD buying!!

Resistance:        1.5030, 1.5115

Support:             1.4850, 1.4810, …1.4210

AUD/USD    –      Substantial pullback overnight and toyed with resistance at 0.7720! Essentially dragged up with NZD and overall USD profit taking. A ring low formation on the daily, however we have an impending rate cut looming.  Short bias while under 0.7750.

Resistance:        0.7720, 0.7750, 0.7850

Support:             0.7550, 0.7450

NZD/USD    –       Kiwi rates at 3.5%. A substantial pullback that led the USD recovery. Respected the 61.8% retrace level and is now toying with the short term 50% retrace level at 0.7400. Will outperform on the NZD crosses and should pressure the AUDNZD to parixoxoxox…….. lower!

Resistance:        0.7450, 7500

Support:             0.7350, 0.7325, 0.7190

Watch USDSGD and USDSEK for entry levels!

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