The Australian dollar is the top performer an hour into North American trade with an advance of more than 1.08% against a weaker dollar. The greenback is sharply lower across the board on strong corporate earnings and optimism that European leaders will agree on a concrete crisis plan to shore up distressed banks and stem the threat of further debt contagion. However conflicting reports continue to leak out of the region as various central bankers and policy makers express their views on the possible expansion of the EFSF bailout fund. Despite speculation that officials remain at odds regarding how to restructure the rescue package, risk appetite continues to gather pace with the dollar suffering as investors turned on the greenback in favor of higher yielding growth backed assets.
The AUD/USD pair breached trendline resistance dating back to August 1st before running out of steam around 1.0360. Topside resistance now stands at the 100% Fibonacci extension taken from the October 18th and 20th troughs at 1.0380 backed by the 1.04-figure and 1.0450. Interim support rests at the 61.8% extension at 1.0290 backed by 1.0265 and the 38.2% extension at 1.2360. With the aussie surging at such an accelerated pace, expect a pullback at some point during the US session.
Key Levels/Indicators
|
Level/Indicator |
Level |
|
100-Day SMA |
1.0442 |
|
50-Day SMA |
1.0232 |
|
20-Day SMA |
0.9954 |
|
2011 AUD High |
1.1079 |
The Canadian dollar saw the smallest gains against the greenback today with an advance of just 0.70% an hour into trade in New York. Dollar weakness coupled with rising crude prices have continued to support the loonie with the pair breaking below key support at the 61.8% Fibonacci extension taken from the October 18th and 20th crests at 1.0135. The pair seems to have broken out of a wedge formation dating back to the start of the week and suggests the greenback may yet remain at the mercy of rising risk appetite. Strong support for the dollar rests at the 100% extension at 1.0070 with subsequent floors seen at Monday’s low at 1.0045 and parity. Topside resistance is eyed at the 76.4% extension at 1.0110 backed by 1.135 and 1.0160.
Key Levels/Indicators
|
Level/Indicator |
Level |
|
100-Day SMA |
0.9864 |
|
50-Day SMA |
1.0048 |
|
20-Day SMA |
1.0282 |
|
2011 CAD High |
0.9406 |
Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.
Twitter: @MBForex
WEB: www.DailyFX.com
