FX News – January 8 2014: Strong USD Drags AUD, CAD

FX Strategy Articles > FX Trading Tips

The AUD/USD pair closed yesterday's session weakly partially due to the strong greenback. Although the pair managed to climb back to the 0.9000 zone at the beginning of the year, it only happened briefly. Right now, it is once again on a slide. It has so far bottomed out at the 0.8900 area.

Yesterday, the pair reached a session low of 0.8893, but was able to recover several hours later.

HiA/AiG released a few minutes ago Australia's Performance of Construction Index in December, which went down from the previous 55.2 to 50.8. The next major announcement from the country will be the Retail Sales data for December (9 January, 12:30 AM, GMT). Expect the Chinese CPI (9 January) and the FOMC Minutes (8 January, 7:00 PM, GMT) to have an impact on the pair.

The AUD/USD pair is currently trading at 0.8918, with initial resistance seen at 0.9002, followed by 0.9024. Meanwhile, initial support is at 0.8952, followed by 0.8929.

Bank of Canada's Governor Stephen Poloz said yesterday that he was, "worried about inflation and how it's underperforming."

This led to a sell-off of the CAD in yesterday's session. Governor Poloz’ statement, coupled with a strong greenback drove the USD/CAD pair to levels not seen in more than three years. It returned above the 1.0700 area, peaking at 1.0780. At the end of trading in New York, the value dropped to 1.0764, which was the weakest close for the pair since November 2009.

The USD/CAD pair is currently trading at 1.0765, with initial resistance seen at 1.0704, followed by 1.0731. Meanwhile, initial support is at 1.0630, followed by 1.0603.

Upcoming Events

Wednesday will be a fairly quiet day in terms of events, except for the release of the FOMC minutes. Thursday and Friday will be busy ones, though, with important events that include the Chinese PMI, BoE Interest Rate Decision, and the US Nonfarm Payrolls.

By FX Strategy Team, Published on 7th of January 2014
eTorro - Trading Starts Here

Start Trading Forex with up to $10,000

  • 100s Videos and FX Strategy articles
  • Advice from our FX traders
  • Practive free with using real time