USD holds firm; JPY up; AUD & CAD down


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By: Andria Pichidi

Both the Dollar and Yen have continued to hold firm against most other currencies amid a backdrop of sputtering global stock markets.

AUD: The Australian Dollar dove following the release of Australia’s October employment report, which showed the unemployment rate ticking higher, to 5.3% from 5.2%. China’s industrial production growth also slowed sharply in October, to 4.7% y/y verses the median forecast for 5.4% growth, with investment growth falling to a record low. Chinese sales also underwhelmed, while preliminary Japanese Q3 GDP disappointed with growth of just 0.1% q/q, with a 0.7% q/q drop in exports shining a light on the impact of trade protectionism.

The Australian dollar dove by over 0.5%, driving AUDUSD to a one-month low at 0.6795, and the AUDNZD cross to a 10-week low, at 1.0625, which coincides with the 20-week SMA. The cross has declined by nearly 2% since the RBNZ unexpectedly refrained from cutting interest rates yesterday. A cross today below the 1.0625 could suggest further fall for the medium term, with next Support at the confluence of 50% Fib. and the 200-day SMA, at 1.0560.

EUR: On a brighter note, German Q3 GDP came in at 0.1% versus the 0.0% median forecast, though Q2 growth was revised lower. The data still helped the Euro lift moderately. EURUSD climbed back above 1.1000 after earlier carving out a fresh one-month low at 1.0994.

YEN: The Yen remained underpinned by safe-haven positioning, albeit moderate. USDJPY printed a nine-day low at 108.62, while both EURJPY and AUDJPY hit new 1-month lows, with both now amid a fifth consecutive day of decline.

CAD: USDCAD is amid a third consecutive week of ascent, and has remained buoyant after printing a 5-month peak at 1.3268 yesterday. The high extended the pronounced gains the pairing has seen since the release of Canada’s October employment report last Friday, which disappointed and caused a reappraisal in BoC monetary policy expectations. At the same time, USOIL prices have turned flat-to-softer following a 1-month up phase, removing what had been a supportive rug from under the Canadian Dollar’s feet. For now, USDCAD looks likely to remain upwardly biased, with the next Resistance at September’s peak, 1.3310, and at October’s 2 consecutive fractals at 1.3345.  Support levels are set at 200-day SMA and 50-day SMA.

EURCAD: The EURCAD on the other hand, presents a continues slip pf Euro against Loonie. Intraday, the asset forms a triangle since October 25. The support around 1.4554 and 1.4520 is a key gauge that if gives way would open the lows around 1.4420-1.4450. The RSI moving around 50 and MACD lines at neutral suggesting consolidation in the short term. In the medium term meanwhile, the overall outlook remains neutral to positive, while if market holds above 1.4570-1.4580, it would be a confirmation that positive bias is strengthening, with the next daily Resistance area, 1.4670-1.4700. 

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