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Dampened Sentiment Bolsters Greenback, AUDUSD Plummets

FOREX
  • The widespread dampening of risk sentiment across global markets has prompted a strong recovery for the US Dollar on Thursday. The USD index has seen a strong recovery over the course of the US session, advancing 0.75% on the day as hawkish central bank rhetoric continues to hamper the mood across equity indices
  • Despite a hawkish ECB president Lagarde, EURUSD had a swift turn lower, making new session lows below 1.0600, soon after reaching fresh six-month highs during the press conference at 1.0735.
  • Losses against the greenback are broad based across G10, however, underperformance for commodities and in particular metals is significantly weighing on AUD, which has plummeted ~2.5%.
  • Despite overall bullish trend conditions AUDUSD has broken initial support at 0.6731, the 20-day EMA and is now approaching the key support level of 0.6657, the 50-day EMA. A clear break of this average would highlight a possible reversal and signal scope for a deeper retracement.
  • Not quite as extreme, yet still substantial, GBP, JPY and NZD have all lost between 1.5-1.9% on the session.
  • Amid the hawkish ECB, EURGBP (+1.45%) has broken above the 50-day EMA, at 0.8653, which marked a key short-term resistance point and in turn eases the bearish technical threat. This opens up a move to 0.8778, the Nov 16 high.
  • No rest on the economic calendar with UK retail sales and Eurozone PMIs headlining a busy European docket on Friday.
Energy BulletsCommodities
Energy BulletsCommodities

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