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- AUD Toying with Key Resistance Levels
- Technical Signal – EUR/CHF – Downtrend Looks to Continue
- US ADP Non-Farm Figure on Tap
| AUD Toying with Key Resistance Levels Posted: 02 Mar 2011 03:00 AM PST
For those watching, the persistent rise of the Australian dollar (AUD) was given impetus recently by soaring commodity prices. With Australia's economy linked with the price of precious metals, the climb in Gold and Silver has been met by a rise in the Aussie as well. What is interesting to note is where the Aussie has reached against a number of its currency rivals. Three pairs stand out in particular: AUD/USD, AUD/CAD, and AUD/CHF (see charts below). These pairs are all testing price parity (the AUD/CHF is not necessarily testing it, but is close enough to warrant interest). Both the AUD/USD and AUD/CAD reached this price mark in October 2010 and have been flirting with this level ever since. The AUD/CHF reached it much sooner, but has since fallen below parity due to the Swiss franc's rising appeal over the second half of 2010. What is worth noting for the first two – but not necessarily the third – is that parity against the USD and CAD represents a price range which has historically lacked sufficiently sustainable support. The question then to ask is, Can the AUD hold its gains against these monetary giants? The CAD is linked with Crude Oil prices which makes its decline versus the AUD somewhat intriguing. The fundamental support doesn't appear as strongly in that pair, but the AUD is rising relatively faster regardless. Making a speculative assessment, it seems the AUD is bouncing within a price range against a few of its primary rivals that has been historically difficult to break beyond. So long as precious metals continue to climb, which appears a given in today's market, the AUD should continue to find support. This makes it interesting to wonder why its value hasn't climbed well beyond parity against these currencies. It may be even more interesting to ask about what forces are holding it back. AUD/USD – Weekly Chart AUD/CAD – Weekly Chart AUD/CHF – Weekly Chart |
| Technical Signal – EUR/CHF – Downtrend Looks to Continue Posted: 01 Mar 2011 11:41 PM PST
After a technical retracement the EUR/CHF should resume its sharp downtrend. In early February the EUR/CHF collapsed at the 200-day moving average February's move took the pair from 1.3200 to 1.2700. The EUR/CHF has since undergone a technical retracement of the February move, climbing as high as the 38.2% Fibonacci level from the February downtrend at 1.2900 where the pair ran into resistance and the bearish trend resumed. A technical retracement actually reinforces a strong trending environment and signals further moves in the direction of the trend. As such, following a breach of the 1.2700 support level, we may expect the EUR/CHF to now target the 2010 low at 1.2400. Resistance is found at yesterday's high of 1.2900, followed by 1.2970, and the falling trend line off of the October and February highs which comes in today at 1.3100.
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| Posted: 01 Mar 2011 10:14 PM PST
Ahead of a potentially volatile day, the US dollar saw some gains in the overnight session. Since yesterday afternoon, the EUR/USD has continuously dropped and is now trading right around the 1.3775 level. Whether the greenback can maintain its current trend is largely dependent on today’s news. Here is a roundup of today’s main economic indicators: 13:15 GMT- US ADP Non-Farm Employment Change Today’s figure is expected to show job growth occurred in the US over the last month, albeit slightly less than in January. If the ADP number comes in at its expected level of 178K, traders can expect the USD to give back some of its recent gains during the afternoon session. 15:00 GMT- Fed Chairman Bernanke Testifies While it is not yet known what Bernanke will say, previous speeches have shown that the Fed Chairman is concerned about the uneven pace of job growth in the US. Any mention of the current high levels of unemployment may drive the dollar down. |
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