 Dollar is making a powerful rally today, breaking through near-term resistance levels against all its major counterparts. This surge is anchored by recent economic data, which paints a picture of a US economy that is cooling but not cracking. This robustness stands in stark contrast to the weakening growth conditions seen in other major economies, as evidenced by today's disappointing services PMI data from China, Eurozone, and UK. Given the relative strength of the US economy, Fed might eventually find itself being the last among major central banks to initiate interest rate cuts. This scenario becomes increasingly likely if the US. continues to demonstrate economic resilience while its global peers falter. The greenback's strength today is not just noteworthy but dominant. It reached a new year-high against Yen, while Euro and Sterling plummeted to their lowest levels since mid-June. Australian Dollar, often seen as a proxy for China risk, was the hardest hit, dropping to its lowest point since last November. New Zealand Dollar didn't fare much better, coming in as the day's second-worst performer. In a curious twist, Canadian Dollar displayed a bit of resiliency, standing as the second strongest for the day. Among European currencies, Sterling appeared to be the better performer, albeit in a losing game. Technically, NZD/USD resumes the fall from 0.6410 today by breaking through 0.5885 support. Immediate attention is now on 100% projection of 0.6537 to 0.5984 from 0.6410 at 0.5857. Decisive break there, together with sustained trading below medium term channel support, could prompt downside acceleration to 161.8% projection at 0.5515, which is close to 0.5511 (2022) low). Even in the event of a strong recovery, the pair's outlook remains bearish as long as 0.6014 resistance holds. In Europe, at the time of writing, FTSE is up 0.12%. DAX is down -0.07%. CAC is down -0.08%. Germany 10-yaer yield is up 0.0082 at 2.590. Earlier in Asia, Nikkei rose 0.30%. Hong Kong HSI dropped -2.06%. China Shanghai SSE dropped -0.71%. Singapore Strait Times dropped -0.37%. Japan 10-year JGB yield rose 0.0112 to 0.658. |
