As EUR/USD Pauses, NZD/USD and USD/CAD Eye Continuation
- EURUSD eyes break of $1.0805, but could see $1.0915 first.
- Commodity FX under pressure as gold, oil slip; RBNZ cut forecast.
The commodity currency complex continues to hold a bearish bias versus the US Dollar. This is not only derived from a cursory look at price (each of the Australian, Canadian, and New Zealand Dollars are trading below their 8-, 21-, and 34-EMAs versus the US dollar), but also a look at retail crowd sentiment (at the time of writing, the SSIs were: AUDUSD at +1.93; USDCAD at -2.39; and NZDUSD at +1.41).
Trading conditions in the commodity FX bloc may be more volatile than elsewhere over the coming days, with a particularly "high" event risk calendar for the Australian and New Zealand Dollars through end of day Wedneday. Of note, Q2'15 Australian CPI and the July Reserve Bank of New Zealand rate decision will all but certainly bring a surge of price action in markets. In the meantime, more reversion in the broader USDOLLAR Index is possible as near-term overbought conditions are digested.
See the above video for technical considerations in EURUSD, AUDUSD, USDCAD, USDJPY, and the USDOLLAR Index.
--- Written by Christopher Vecchio, Currency Strategist
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