FX Report

FX Report

The Australian dollar fell against its US peer overnight due to a sell off across the board in risk assets. Both the Aussie and the Kiwi were holding in well during the European session but couldn’t hold onto gains, and were hit in line with selling in the US equities. It would appear there was some nervousness after a Senior spokesman for Chancellor Angela Merkel said Spain’s Prime Minister must decide whether the country needs a full rescue (Bloomberg).

The Australian Dollar has hit a low of 1.035 in Asian trading this morning and has thus broken through my key 1.038 to 1.040 support zone. The move doesnt look impulsive to me to the downside but you just have to heed the price points. At this juncture, I really don’t have a clear setup and it is important for analysts and traders to step aside at such junctures. If price can regain the 1.0430 level as shown in the chart below, this would be a sign of strength. Traders who have shorted the breakdown could consider stops above that zone. 

The strongest pair against the USD remains the Kiwi. NZDUSD continues to hold the 0.8180 support zone and traders could continue to look for buy setups out of this zone with tight stops.

AUDUSD 60mins:
The Aussie broke down through the recent support zone I have been looking at. The short term trend remains down and only a move back above 1.043 would indicate a more meaningful turn. Note that the 61.8 Fibonacci retracement does comes in around 1.0340 as a potential long scalping level.

NZDUSD Daily:
A breakout above the downward trendline and previous swing high. Furthermore, all the moving averages are sloping upward thus traders should look for continued retracements back into this strong trend. 

NZDUSD 60mins:
The Kiwi remains one of the strongest pairs globally against the USD. Price is retesting the previous breakout zone and this offers a potential low risk entry into the trend. The recent pullback from the high looks corrective to me which implies that this is not the beginning of a new strong trend down. 

EURUSD 60mins:
The EURO is still holding the 1.29 level but is looking increasingly vulnerable to a breakdown. Traders could look to sell on breaks of this level with tight stops targeting 1.28. 

AUDJPY 60mins:
AUDJPY has now entered into a possible support area with bullish divergences appearing. This implies that the downward trend is tiring. Traders should wait for confirmation for a potential turn. A failure to bounce out of here opens up a retest of the lows at 80.