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Risk Currencies Climb on Weak Dollar- Swiss Wedge Breakout Imminent
Written by article default Wednesday, 24 August 2011 08:00
Daily Winners and Losers
The New Zealand Dollar tops the performance charts for the second consecutive day with the kiwi surging nearly 1.2% against a weaker greenback. The gains come amid a strong rally in the equity markets with the Dow, the S&P, and the NASDAQ advancing 1.1%, 1.24% and 1.67% respectively. Kiwi strength was highlighted in today’s scalp report which attempts to play today’s gains against that of the aussie. The turn in risk has come to the benefit of the high yielders, with the kiwi well supported here above the 38.2% Fibonacci extension taken from the June 16th and August 8th troughs at 0.8285. Interim support rests here with subsequent floors seen at 0.8230 and the 23.6% extension at 0.8160. Topside resistance holds at 0.8340 with a breach eyeing targets at the 50% extension at 0.8385 and the August 17th high at 0.8420. Investors will be eyeing data out of New Zealand overnight with the July trade balance figures on tap. Consensus estimates call for a deficit of -100M as exports slumped amid a rise in imports.
Key Levels/Indicators
|
Level/Indicator |
Level |
|
50-Day SMA |
0.8350 |
|
20-Day SMA |
0.8418 |
|
10-Day SMA |
0.8275 |
|
2011 NZD High |
0.8842 |
Upcoming Events
|
Date |
GMT |
Release |
Expected |
Actual |
|
8/23 |
22:45 |
Trade Balance (New Zealand dollars) (JUL) |
-100M |
230M |
|
8/23 |
22:45 |
Exports (New Zealand dollars) (JUL) |
3.85B |
3.97B |
|
8/23 |
22:45 |
Imports (New Zealand dollars) (JUL) |
3.90B |
3.74B |
|
8/23 |
22:45 |
Balance (YTD) (New Zealand dollars) (JUL) |
1104 |
1021 |
The Swiss franc continues to lag the majors against the greenback, climbing a mere 0.17% early in North American trade. As cited in yesterday’s Winners/Losers Report, the swissie has remained well supported as broader market sentiment continues to improve after better than expected data prints out of China and the Eurozone. The USD/CHF pair continues to straddle the 0.7885 level as it bottlenecks into a wedge formation with a topside breach eyeing targets at 0.7920, 0.7960, and the 76.4% Fibonacci retracement taken from the July 19th descent at 0.7990. Interim support rests at the 61.8% retracement at 0.7815 with subsequent floors seen lower at 0.7770 and 0.7730.
Key Levels/Indicators
|
Level/Indicator |
Level |
|
50-Day SMA |
0.8091 |
|
20-Day SMA |
0.7750 |
|
10-Day SMA |
0.7791 |
|
2011 CHF High |
0.7078 |
Written by Michael Boutros, Currency Analyst for DailyFX.com
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