FxWirePro: trend in commodity driven currencies, correction risks growing for antipodeans
Source: FxWire Pro - Currencies Movement / 13 Mar 2017 07:49:54 America/New_York
The bearish shift for CAD The backdrop for commodity currencies has deteriorated over the past week despite the persistent bullish tone for risk sentiment while suggesting a growing risk that the broad USD uptrend is attempting to get back on track. A key highlight is the reversal in AUDUSD after approaching critical resistance at the medium term range highs.
In turn, a deeper retracement now seems due. Again, the 0.7780/0.7850 resistance zone is the critical hurdle to confirm a more sustained rally phase.
However, with the break of key initial support at the 0.7600 near term range lows, the short-term downside risks are on the rise. Also, note that EURAUD is showing signs of a short term base after effectively holding critical support at the1.3677 low from 2015. Still, we do note that we continue to see upside risks for AUD against NZD especially on a break of the important 1.0766/76 medium term range highs. In this regard, the backdrop for NZD has staged a bearish shift this week in line with the impulsive break of the 0.7150/20 support zone for NZDUSD (Feb low/200-day MA).
In turn, the downside risks are on the rise as we see the potential for a closer test of critical support at the 0.6862 December low. Similarly, this week's shift for CAD implies additional underperformance is due.
Importantly, the lift in USDCAD from the key 1.30 support zone and short term range lows suggests a closer test of the 1.36 range highs is now likely. Again, this area will define whether a more sustained advance into the 1.40/1.41 zone can develop. Note the key 1.3210/30 breakout area should maintain the more immediate upside risks. The bearish framework for CAD is consistent with our sell recommendations for CADNOK and CADSEK.© FxWire Pro 2020. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.