The two commodities currencies, AUD and NZD, has the highest bullish momentum today, with the latter leading the gain after Prime Minister Jacinda Ardern named Adrian Orr, wealth fund chief to be the new governor of RBNZ. This hawkish announcement pushes the NZD upwards against every currency, with NZD/JPY initially leading the movement before GBP/NZD took over. Along with JPY opening the market with negative results in BSI Manufacturing Index and M2 Money Stocks, this pushes the NZD/JPY pairing out from the channel line created in daily chart. I am currently bullish on this trade and is expected to see further bullish moment at first target 79.35.
Surprisingly, with minimal fundamentals today, major currencies suffered heavy losses, including GBP, USD, CAD and JPY, with the sterling leading the losses. Although Brexit Secretary David Davis mentions the idea of UK securing free-trade deal with no tariff after leaving the EU, the buyers fail to recognise it and instead focuses on the failure of Brexit moving forward during last Friday. The sterling continues to dip with the lack of effective results on Brexit bill, along with the issues on Irish borders, brings down the confidence of investors. Significant technical analysis remains unseen and with the political issues surrounding the GBP, it is wise to not take significant actions on the cable until a more viable chart pattern can be seen.
The positive NFP data from last week smoothen the preparation of rate hike this week during FOMC statement scheduled to be released on Thursday 3:00 a.m. (GMT +8.00). This expectation however, did not bring rise to the dollar today as it gives out its last week greenback. In the H4 diagram of EUR/USD pairing as shown in the diagram below, the USD reverses its gain from last week and the pair breaks out from the trendline, the second candle in the H4 chart further confirms the breakout. I am currently bullish in this pair and the expected first target is at level 1.184 with second target at level 1.186.
The loonie further extends its losses after BOC announcement last week. In USD/CAD, the pair seems to be consolidating and moving sideways against one another in H1 chart. Any breakthrough of the resistance level at 1.28680 or support line at 1.28130 may indicate a significant direction movement. I am currently neutral on the pairing but given the upcoming FOMC meeting on Thursday, I believed a hike up of USD will be more noticeable. However, the upcoming BOC statements on Friday may rejects the bull movement of the dollar. I believe however, that given BOC expresses its cautious last week as well as its lack of interest for a rate hike, Friday announcement may not move the CAD market much.
