Technicals dominated in NY trading as economic news was scarce. The strong negative correlation between risky assets and the US dollar remained solid and the buck benefited from a large unwind in risk appetite. US equities closed down -1.2% after another attempt of 1100 on the S&P failed miserably. EUR/USD followed stocks closely and the break below 1.50 elicited some major fireworks. The pair never looked back on its way to a low near the 1.4850/45 zone. The parabolic move looks a touch overdone in the short-term and we would not be surprised to see a rebound overnight.
Commodities were under pressure on the USD resurgence. Gold collapsed more than $20 from the intraday high near $1060 â€ where, once again, the selling interest was prevalent. $1036.70 now looks huge in XAU/USD on a daily closing basis. This is the October 7 low and it came the day after the massive $1017 to $1042 rally. Close below opens up potential to $1028 â€ where the Kijun line on the Ichimoku charts lurks. Oil also slipped about -$2 on the day and back below the $80 mark to boot. This kept the pressure on the so-called commodity currencies. AUD/USD squeezed from a 0.9230 open towards the 0.9150/55 area while USD/CAD surged towards 1.0700 from a 1.0560/65 open.
The upcoming Asia session is also light on economic news and only the New Zealand business confidence indicator is noteworthy. Improvement from the -4 read the prior month should see Kiwi grind a touch higher near-term. For now, the pair remains under heavy pressure while below the 200-hour sma near 0.7500 while important support rests down by the 0.7435 area.