The heat is back on, with the AUDZND retesting short-term support after a brief rally last week. The pair has formed a bearish channel, and continues to make lower highs, and lower lows. The last test of the upper channel lne was met with swift selling. If prices can break past the 1.27 region, they may quickly plummet to the 1.25 support area formed in August.
The Canadian dollar continues to show significant strength against the dollar, even as other currencies have pulled back. Prices remain in a narrow region, below short-term resistance at 1.0150 and above support at .9975. Prices appear ready to break down through .9975, with each rally of the dollar producing a weaker bounce. This relative strength is further supported by the fact that although oil prices fell more than 4% from their highs, the CAD has barely budged, despite the strong relationship between the two.
The EURJPY has recently been a difficult pair to trade. The pair recently tested support near 111.50 twice, bouncing both times, although the present bounce (point B) lacks the upwards momentum which the prior bounce had (point A). The surprise bounce (point A) from late October has completely faded, leaving the pair prepared to drop without further interruption. The repetitive tests of support, with weakening buying suggests tha prices are likely to break through and retest their September lows.
Written by bforex.com