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Kiwi in range, but grinds down slowly

After a sharp fall and subsequent correction in the first part of March, Kiwi continues to grind down, slowly. This relatively high yielding currency has been less sensitive to risk than in the past. Overnight U.S. attack on Syria barely dented it.
The pair is trading near the lower extreme of the 2015 - 2017 channel. A sustained break below 0.6890 (March low) and 0.6860 (December low) could lead to a test of 0.6750 - 0.68 area (50.0% retracement of the 2015 - 2016 upswing). 0.70 - 0.7025 is the…
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Aussie tests 38.2% retracement

Australian dollar recouped more than two thirds of post U.S. election decline and is among better performers against the U.S dollar of late. Relatively high yield and rising copper prices are two factors that have been supporting the currency.
The correction stalled ahead of 0.75 which coincides with 38.2% retracement of the mentioned decline. The resistance zone is reinforced by 200 DMA, running just above the big figure. 0.7425 is the initial support.
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Aussie may extend towards 0.80 in the weeks ahead

Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
January - April rally topped out near the intersection of 38.2% retracement of 2014 - 2016 downswing and 2011 - 2016 support/resistance line. The pa…
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UPDATE 6: The U.S. dollar mostly extended its fourth quarter gains against G7 major currencies this week. The exceptions were the Canadian and the Australian dollars while the New Zealand dollar was pulled down by expectations of further easing by the RBNZ. Worries about global growth after much weaker than expected Chinese export data were diluted today by the first positive PPI figure in five years from the #2 economy which could be a sign of better times ahead. A gradual tightening from the Fed that we're seeing should keep risk assets supported.

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UPDATE 7: Major currencies finished the week mixed against the U.S. dollar. The euro moved lower after Draghi dispelled speculation of an early tapering of the ECB asset buying. The franc followed suit. The yen ended the week in the middle of its two-week range. The pound closed marginally higher on short covering. The Canadian dollar tested 1.30 on pretty hawkish statement only to reverse sharply on Poloz's revelation that they considered a rate cut. The Australian and New Zealand dollars remain supported by carry traders, though the former sold off after weak labour force data.

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UPDATE 8: Advance version of the U.S. GDP for the third quarter came in at 2.9% (vs. 2.5% expected and 1.4% previous). The dollar jumped after the release but the gains were quickly reversed. Selling has just been intensified after the news came out that the FBI reopened Hillary Clinton investigation. European currencies and yen are benefiting the most but those are also the currencies that fell the most in the past couple of weeks. Looks more like a position squaring ahead of the next week which will feature BOJ, Fed and BOE meetings.

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UPDATE 9: Sharp moves on Friday afternoon were followed by a relatively calm opening on Monday. Currencies have been mostly unwinding those moves in the first twelve hours of trading. The U.S. dollar rose against most of the major currencies with Canadian and Australian dollars two notable exceptions. Holidays in some countries over the next few days shouldn't have a great deal of influence on already low participation that we've been witnessing lately. If past summer is of any guide, otherwise "slow" months can be quite volatile if there's enough substance to drive price moves.

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UPDATE 10: The RBA held cash rate at the record low of 1.50% at today's meeting. Even though this decision has been broadly anticipated, the pair added about 15 pips pre-release and around 50 pips post-release. A few were expecting a cut but the rally is partly due to lack of dovishness from them. Technically, the pair bounced from 100 and 50 DMA last week and also successfully tested the trendline, drawn off of 2013 and 2014 highs, from above. 0.75 - 0.77 range is still in play and a test of the upper extreme appears to be in the making.

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AUD/USD may surge towards 0.80 in September

Technical Tools
Support and resistance (S/R). Price levels, trendlines and Fibonacci retracements. Price action, candlestick and chart patterns. Simple moving averages (SMA). Commitments of traders (COT) indicator, which displays speculative positioning in FX futures market, used as a proxy for speculative positioning in spot FX market.
Weekly Chart
January - April rally topped out near the confluence of 38.2% retracement of 2014 - 2016 downswing, 2011 - 2016 support/resistance line and 100 wee…
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UPDATE 5: The U.S. dollar made an impressive comeback on Friday. It ended the day higher in every G7 major currency pair. On the week, the dollar closed higher against the Cable, the Loonie and the Aussie. The rally was widely attributed to hawkish comments from a dovish Fed president Eric Rosengren, which hit markets as N.A. session got underway. The comments spooked markets, risk assets in particular, many of which closed near the lows of the day. All this makes a speech from also dovish Fed governor Lael Brainard on Monday even more important.

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UPDATE 6: Week ahead will be among the most important ones this year. Even though the market discounts little chance of a Fed hike in September, the meeting will shape expectations for whether we'll get one this year at all. Perhaps even more important will be the decision from the BOJ. This bank has been struggling with deflation and upward pressure on the yen for decades - can they finally put end to that? RBNZ is another central bank that meets this week. No action from them is widely expected, after they cut rates in August.

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UPDATE 7: FOMC kept the federal funds rate steady at yesterday's meeting. The outcome was widely anticipated though there were still a lot of players expecting an early hike.  It was a "hawkish hold" with the committee sending a strong implicit signal that the second hike is not far away, barring any economic shocks. The dollar fell after the decision and extended its losses in today's European session. It then recouped a hefty part of the losses in the N.A. session which is consistent with a very real prospect of a rate hike in December.

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UPDATE 8: Major currencies ended the first day of the week mixed but mostly higher against the dollar. The winner was the yen which approached the strong 100 level once again. A convincing break below it could send few ripples through the FX market, particularly via crosses such as GBP/JPY, AUD/JPY and NZD/JPY. Canadian dollar was the loser of the day, following through on the weakness after Friday's inflation and retail sales reports. Market focus is now turning to the U.S. elections. It's also the last week of the quarter so we may well witness some larger position squaring flows.

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UPDATE 9: The U.S. dollar ended the month higher against the pound and the Canadian dollar but it closed lower against the euro, the franc, the yen and the antipodean dollars. It was a great month for range traders while trend followers are still waiting for a real breakout (higher TFs). They may not have to wait for too long. Contracting ranges will sooner or later give way, in one or the other direction. Uncertainty surrounding U.S. presidental election and potential for a December FOMC rate hike should keep the dollar supported in the fourth quarter.

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