The euro retraced the overnight decline, with the EUR/USD advancing to a fresh yearly high of 1.4653 during the U.S. trade, while the NZD/USD retraced the two-day rally from the previous week to slip below 0.7000.
The euro retraced the overnight decline, with the EUR/USD advancing to a fresh yearly high of 1.4653 during the U.S. trade however, the pair may continue to fall back from the high ahead of the market close as intraday price action exceeds its average true range. The euro-dollar may continue to find psychological support ahead of 1.4500 as economists anticipate the ZEW investor confidence survey to rise to a three-year high of 60.0 in September but, the intraday doji top favors a bearish outlook for the pair as the 30-minute RSI falls back from overbought territory. Nevertheless, as the daily relative strength index currently holds at 69, gains are likely to be capped throughout the U.S. session, and the pair is likely to hold a narrow range ahead of the slew of economic data at 9:00 GMT tomorrow.
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The New Zealand dollar tumbled lower against the greenback following the slump in retail spending, and may continue to pare the overnight decline as the daily move exceed the ATR. As a result, the NZD/USD is likely to hold above 0.6960 throughout the U.S. trade and may continue to hold a narrow range going into the Asian session as the RSI pulls out of oversold territory however, the economic docket is likely to stoke increased volatility on the kiwi-dollar as investors weigh the outlook for future growth. Nevertheless, as the pair continues to make higher lows, we may see the kiwi-yen test the yearly high at 0.7091 and break above 0.7100 to retrace the sell-off from August 2008 but nevertheless, as equity futures foreshadow a lower open for the Asian stock markets, a rise in risk appetite could led the pair to retrace the advance from the previous week.
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[I]To discuss this report contact David Song, Currency Analyst: <[email protected]>[/I]