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Greenback Strength Gathers Momentum Amid Pressure On Equities

USD
  • The pressure on major equity indices is continuing to underpin the recovery in the greenback throughout Monday’s US trading session. The gap higher for the USD following the ISM data broadly consolidated and then gathered momentum over the course of the session.
  • Significant weakness has been seen in the likes of cable (-1.68%) and NZD (-1.45%) amid notable outperformance for Euro crosses amid the renewed risk off backdrop.
  • Initial support for cable is at 1.2154, High Nov 24 and a recent breakout point.
  • Despite the Kiwi weakness, AUDNZD continues to trade in close proximity to recent lows, following the break of 1.0750 last week and the technical outlook remains bearish ahead of the RBA decision overnight. Full MNI preview here.
  • The dip in sentiment has also filtered through to emerging market, with the Mexican peso particularly feeling the pinch. USDMXN is displaying some significant reversal patterns amid the 2% rally on Monday and a sustained break of 19.8102, 50.0% of the Sep 28 - Nov 29 bear leg, should provide an additional bullish impulse.

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