Canadian Dollar Extends Advance, New Zealand Dollar Bucks Trend Read more: DailyFX
Posted 03-02-2010 at 11:27 AM by DailyFX
Tags aud, dailyfx, forex, technical analysis
The Canadian dollar extended the rally from Monday and remains the best performing currency against the greenback, while the New Zealand pared the previous day’s advance and slipped back below the 200-Day SMA (0.6950) to reach a low of 0.6924.
The Canadian dollar extended the rally from Monday and remains the best performing currency against the greenback, and the exchange rate may continue to push lower going into the Asian trade as investors raise bets for a rate hike by the Bank of Canada later this year . The USD/CAD is currently 80pips lower on the day after moving 114% of its daily ATR, but the decline appears to be tapering off as the 30-minute RSI bounces back from a low of 24. As a result, we may see the dollar-loonie pare the overnight decline throughout the U.S. session, but the rise in risk appetite may continue to weigh on the exchange rate as the greenback remains a popular funding-currency. Nevertheless, as the Federal Reserve aims to normalize policy this year, we are likely to see the strong correlation between the U.S. dollar and risk taper off, and expectations for a rate hike by the FOMC could drive the exchange rate higher as borrowing costs remain at a record-low of 0.25%.
The New Zealand dollar pared the previous day’s advance and slipped back below the 200-Day SMA (0.6950) to reach a low of 0.6924, and the exchange rate is likely to maintain the broad range carried over from the previous month as investors weigh the prospects for future policy. The NZD/USD is nearly 40pips lower from the open after moving 88% of its average true range, and we may see price action hold between the 240-SMA (0.6945) and the 120-SMA (0.6975) going into the Asian session as the 30-Minute RSI bounces back from oversold territory. Nevertheless, the kiwi-dollar looks posed to a breakout to the downside as daily price action approaches the apex of the descending triangle formation, and we may see the pair continue to retrace the advance from the previous year as the Fed aims to normalize policy over the coming months.
Read more: DailyFX - Canadian Dollar Extends Advance, New Zealand Dollar Bucks Trend
Join us to discuss the outlook for the major currencies on the DailyFX Forums
To discuss this report contact David Song, Currency Analyst: dsong@fxcm.com
The Canadian dollar extended the rally from Monday and remains the best performing currency against the greenback, and the exchange rate may continue to push lower going into the Asian trade as investors raise bets for a rate hike by the Bank of Canada later this year . The USD/CAD is currently 80pips lower on the day after moving 114% of its daily ATR, but the decline appears to be tapering off as the 30-minute RSI bounces back from a low of 24. As a result, we may see the dollar-loonie pare the overnight decline throughout the U.S. session, but the rise in risk appetite may continue to weigh on the exchange rate as the greenback remains a popular funding-currency. Nevertheless, as the Federal Reserve aims to normalize policy this year, we are likely to see the strong correlation between the U.S. dollar and risk taper off, and expectations for a rate hike by the FOMC could drive the exchange rate higher as borrowing costs remain at a record-low of 0.25%.
The New Zealand dollar pared the previous day’s advance and slipped back below the 200-Day SMA (0.6950) to reach a low of 0.6924, and the exchange rate is likely to maintain the broad range carried over from the previous month as investors weigh the prospects for future policy. The NZD/USD is nearly 40pips lower from the open after moving 88% of its average true range, and we may see price action hold between the 240-SMA (0.6945) and the 120-SMA (0.6975) going into the Asian session as the 30-Minute RSI bounces back from oversold territory. Nevertheless, the kiwi-dollar looks posed to a breakout to the downside as daily price action approaches the apex of the descending triangle formation, and we may see the pair continue to retrace the advance from the previous year as the Fed aims to normalize policy over the coming months.
Read more: DailyFX - Canadian Dollar Extends Advance, New Zealand Dollar Bucks Trend
Join us to discuss the outlook for the major currencies on the DailyFX Forums
To discuss this report contact David Song, Currency Analyst: dsong@fxcm.com
DailyFX provides forex news on the economic reports and political events that influence the currency market.
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