12/12/2017
AUD and NZD continues to lead the market with significant bullish momentum. Despite having significant drop (more than 2%) reported on Sydney drives property price, it fails to shake investor’s confidence on the Australian dollar. What’s surprising was the fact that little to no catalyst contributed to the gains in AUD except probable technical strength. AxiTrader Strategist Greg McKenna described the current forex market as ‘messy’ and unpredictable. The Aussie managed to rally against all currencies, surpassing even NZD on the U.S. open, with EUR leading the loss. RBA Governor Philip Lowe is scheduled to present his statement seven hours later. With recent fundamental weakness and the RBA expressing its comfort at current interest rate level, we're not likely to see a change in monetary tightening.
Despite the surging Brent Oil topping its 2-years high after a shutdown of the UK’s biggest North Sea oil pipeline, the oil commodity currency fails to follow up as loonie continues to embrace bearish environment on last week’s BOC statements. The rise in oil prices did help CAD to halt its dips and a strong consolidation is formed against the USD. I believed a breakout at resistance level 1.28680 or support level 1.28130 will prompt a direction.
Despite optimism on U.S. economic and outlook, the greenback solely contributes to the rally of U.S. stocks and Index but the currency fails to follow. However ahead of Wednesday's FOMC rate decision on Wednesday (Malaysia’s time: GMT+ 8:00), the dollar is most likely to regain its rally if inflation shows stronger and monetary policy tightened as planned. With the consolidation in both USD/CAD and USD/JPY pairing, I believe that a jump toward 1.29 and 114 respectively can be secured.
EUR’s negative fundamental on German ZEW Economic Sentiment led the dips continuation of the currency against the dollar and sterling. On EUR/USD, the pair retested support level 1.1735 and a breakthrough would lead to further bearish downtrend while on EUR/GBP, the pair finds resistance level at 0.88450. It is unclear still whether GBP will continue pushing higher considering the uncertainty of the current Brexit talk.