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Charts of the day - The potential pullbacks of the commodity currencies

australian dollars

The commodity currencies have been strengthening through the course of the war-induced price spikes of global commodities. The mining-dominated AUD, the oil-backed CAD, and the farming-supported NZD are in the lead of the major currencies despite a strengthening USD. Also, with the strong post-pandemic economic recovery in these export-commodity-dependent countries, the local currencies are in demand for safe-haven assets, while Eurodollar and British Pound falling out of favour due to geopolitical uncertainties.

From the technical perspective, the three major commodity currencies might be losing steam against the USD in the near term, given a combining signal of the indicators.

AUD/USD - Daily

Key technical elements:

  • The uptrend is still intact, with an imminent pull back at the potential resistance at the upper band of the ascending channel, overlapping with the 61.80% of the Fibonacci retracement at 0.7540
  • The RSI and Stochastic are flattening in the overbought territory, indicating the bullish momentum is fading

Key price levels:

Supports: 0.7436, 0.7334

Resistances: 0.7540

NZD/USD-Daily

Key technical elements:

  • The uptrend is still intact, with an imminent pull back at the potential resistance at the upper band of the ascending channel, overlapping with the 50.00% of the Fibonacci retracement at 0.6996
  • The pair is also pressured by the long-term trend line parallel with the trend line from the February high
  • The two moving averages of Stochastic are flattening in the overbought territory, indicating the bullish momentum is fading, signalizing a potential sell opportunity

Key price levels:

Supports: 0.6883

Resistances: 0.6996

USD/CAD-Daily

Key technical elements:

  • The bearish momentum is fading with stochastic moving into the oversold territory
  • RSI is flattening, indicating a potential reversal opportunity
  • The pair is approaching to the key resistance at the 50.00% Fibonacci retracement, and the January low

Key price levels:

Supports: 1.2470

Resistances: 1.2581

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