US dollar eases off monthly highs

The Swiss franc is the top performing currency against a weaker dollar early in North American trade with an advance of more than 0.65%. As noted the in yesterday’s USD Trading report, the greenback softened in overnight trade with the Dow Jones FXCM Dollar Index (Ticker:USDollar) easing off recent one month highs after advancing more than 1.5% this week on the back of a global sell-off in risk assets. The swissie continues to trade within the confines of an ascending channel dating back to late October as dollar advances weighed on the franc.

The USD/CHF pair now holds just below soft resistance at 0.9175 with subsequent ceilings eyed at the 100% Fibonacci extension taken from the September 15th and October 27th troughs at 0.9230, 0.9280, and the October 6th high at 0.9315. Interim support rests at 0.9140 backed by the 76.4% extension at 0.9080 and 0.9030. Look for dollar losses to be tempered throughout the session as ongoing concerns about the European debt crisis limit advances in risk assets.

Key Levels/Indicators

Level/Indicator

Level

100-Day SMA

0.8497

50-Day SMA

0.8960

20-Day SMA

0.8928

2011 CHF High

0.7079

The New Zealand dollar is the weakest performing currency for the fourth consecutive day with the kiwi off by a modest 0.04% more than an hour into US trade. The kiwi continues to lag the majors in advances while outpacing risk currencies on the downside. Heightened concerns about New Zealand’s exposure to European sovereign debt have continued to weigh on the currency with kiwi remaining the worst performer against the dollar this week with a loss of more than 3.4%.

The NZD/USD briefly broke above the 61.8% Fibonacci extension taken from the October 27th and November 13th crests at 0.7605 before quickly paring gains after rebounding off soft resistance at the 0.7640 level. Interim support for the kiwi now rests at 0.7565 with subsequent floors seen at the 76.4% extension at 0.7530 and the 0.75-figure. A break back above the 61.8% extension eyes topside targets at the convergence of channel resistance at the 0.7640 level, with extended topside targets held at the 50% extension at 0.7665 and the 38.2% extension at 0.7725.

Key Levels/Indicators

Level/Indicator

Level

100-Day SMA

0.8172

50-Day SMA

0.7932

20-Day SMA

0.7927

2011 NZD High

0.8842

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

About the Author
Michael Boutros Michael Boutros, Currency Analyst for DailyFX.com is a Technical/Fundamental Analyst specializing in the FX markets. E-mail: mboutros@fxcm.com.
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