A slide that began despite OK ADP data and on dovish Dudley became a total dollar dive on the poor ISM Non-Manufacturing PMI. The US economy doesn’t look good and a rate hike has been pushed back into infinity.
But this crash is a slow motion one, with every big slide followed by small slide, which in turn is followed by another bigger one.
EUR/USD, the pair that has been stuck in a narrow and frustrating range for ages, is certainly on the move: 2% and a huge rise from hugging the 1.09 level to a new high of 1.1145, breaking above the post-Draghi highs:
Earlier it broke above downtrend resistance. The levels that held it tight during quite a long time are gone. This is how a big breakout looks like.
Further resistance awaits at 1.1215, 1.1290 and 1.1373 before the mighty 1.1460. Support is now at 1.1070 and 1.10.
The euro is not alone. It’s safe haven was hit hard only on Friday by the Bank of Japan. The central bank in Tokyo went negative, sending dollar/yen to 121.50. It’s all gone with the pair back at 117.
This is a drop of around 2% from the highs and a very big crash, to say the least.
The British pound enjoyed some positive news about the EU and the UK getting closer to an agreement and is not looking to the BOE rate decision and QIR.
1.48 is the line on the topside after the pair reached 1.4650. 1.4480 is support. The pair is up 1.5% at the time of writing.
The Canadian dollar continues its recovery path and is close to closing 900 pips below the peak seen in late January, just before the BOC did not cut rates.
The loonie managed to emerge as a winner despite a big rise in crude inventories as well as a disappointing outcome for distillates. All the oil sloshing around did not hurt oil prices nor the C$ for a long time, and allowed USD/CAD to dip under 1.38. It’s down around 2%.
The Australian dollar is also on the rise, over 2%, but in terms of pips, this is a slower moving pair. Australian data overnight was mixed, with a strong rise in building approvals and a big trade deficit on the other hand.
AUD/USD broke above resistance at 0.7150 and reached a high of 0.7180. Further resistance is at 0.7220.
The kiwi enjoyed one of the biggest rallies, worth around 2.6%. One of the specific drivers of NZD/USD has been the excellent jobs report in New Zealand, that showed a drop of the unemployment rate to 5.3%. Yes, it came with a drop in the participation rate, but the employment change was a beat as well.
NZD/USD is at 0.6680 after touching resistance at 0.67. Further resistance awaits at 0.6790.Get the 5 most predictable currency pairs