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11 Apr 2013
Antipodean currencies outperform
FXstreet.com (Córdoba) - The US dollar extended its decline across the board on Thursday as positive sentiment among markets favored risky assets in detriment of the greenback. The USD found some respite in better-than-expected US jobless claims but the recovery was short-lived.
Positive labor data adds to prospects the Fed could consider abandoning its ultra-loose policy after FOMC minutes showed members have been discussing the appropriate timing for such move.
Currencies linked to commodities are among the best performers as stocks continue to push higher around the globe.
"Risk sentiment has been strong and positive in recent days and much of that tone has been credited to the powerful monetary policies announced in Japan late last week", says the TD Securities team. "The drive toward carry trades in particular seems to be one of the clearest implications, and the strong demand for Antipodean debt and currency in particular is evidence of those flows".
Kiwi a shining star in the FX space
The New Zealand dollar is among the top performers, having risen over 250 pips this week, and accumulating a gain of 3.7% in April, NZD/USD reached its highest level In 20 months at 0.8675 today.
"The NZD has fared best in the aftermath of last week's BoJ meeting, with some strong domestic data helping the outperformance. The latest surge overnight (of over 1%) was bolstered by another robust housing price release", says TD analyst team.
Technically speaking, NZD/USD looks bullish in almost every timeframe, although with indicators reaching extreme overbought levels in short-term charts, the pair could see a phase of consolidation before another leg higher.
The 0.8555 area, 38% retracement of the 0.8160/0.8675 rally, is the immediate support level to watch, although setbacks could be consider as merely corrective as long as the pair holds above 0.8500.
On the upside, immediate target would be 0.8700 (psychological level) and a break higher could open the way for a test of the 0.8790 area ahead of 0.8842 peak reached in August 2011 and its highest level in at least 15 years.
The Aussie however, seems a little bit more vulnerable as gains have been tempered by a very weak employment report. Still data did not stop AUD/USD from making fresh cycle highs. 1.0600 stands as the next bullish target.
Positive labor data adds to prospects the Fed could consider abandoning its ultra-loose policy after FOMC minutes showed members have been discussing the appropriate timing for such move.
Currencies linked to commodities are among the best performers as stocks continue to push higher around the globe.
"Risk sentiment has been strong and positive in recent days and much of that tone has been credited to the powerful monetary policies announced in Japan late last week", says the TD Securities team. "The drive toward carry trades in particular seems to be one of the clearest implications, and the strong demand for Antipodean debt and currency in particular is evidence of those flows".
Kiwi a shining star in the FX space
The New Zealand dollar is among the top performers, having risen over 250 pips this week, and accumulating a gain of 3.7% in April, NZD/USD reached its highest level In 20 months at 0.8675 today.
"The NZD has fared best in the aftermath of last week's BoJ meeting, with some strong domestic data helping the outperformance. The latest surge overnight (of over 1%) was bolstered by another robust housing price release", says TD analyst team.
Technically speaking, NZD/USD looks bullish in almost every timeframe, although with indicators reaching extreme overbought levels in short-term charts, the pair could see a phase of consolidation before another leg higher.
The 0.8555 area, 38% retracement of the 0.8160/0.8675 rally, is the immediate support level to watch, although setbacks could be consider as merely corrective as long as the pair holds above 0.8500.
On the upside, immediate target would be 0.8700 (psychological level) and a break higher could open the way for a test of the 0.8790 area ahead of 0.8842 peak reached in August 2011 and its highest level in at least 15 years.
The Aussie however, seems a little bit more vulnerable as gains have been tempered by a very weak employment report. Still data did not stop AUD/USD from making fresh cycle highs. 1.0600 stands as the next bullish target.