Dollar is sold off sharply across the board on rising commodities as well as return of risk appetite. Dollar index breaks through key support level of 74.19 made in 2009 and is possibly heading towards 2008 all time low of 70.70. Gold jumps to new record high of 1509.5 on inflation expectations while crude oil is also back trading above 112 level. Surge in commodity prices takes Aussie and Loonie higher, with AUD/USD making another record high above 1.077, as also boosted by strong PPI data. USD/CAD also extends recent decline and is trading below 0.95 level. European majors are also firm against dollar. One development to note is that USD/JPY also breaks through 82 level while other yen crosses are relatively steady.
Investors sentiments were lifted by strong US earnings including Apple, which second quarter profit almost doubled. Nasdaq had the biggest daily rise in six months while DOW closed at the highest level since June 5 2008. Technically, DOW's break of 12450 resistance indicates that recent uptrend is not over yet. And judging from current momentum, DOW would likely take out long term projection level of 6469 to 11258 from 9614 at 12573. The development indeed favors a test on 13000 psychological level. Such strength in risk appetite will likely push dollar further lower and give continuous boost to Aussie.
Dollar index's break of 74.19 support is relatively easy. Outlook remains bearish as long as 75.81 resistance holds even in case of rebound. Current decline should extend to next cluster projection level of 61.8% projection of 88.70 to 75.63 from 81.31 at 73.27, 100% projection of 89.62 to 74.19 from 88.70 at 73.27. This 73.27 level will be closely watched on possibly of rebound. But based on accelerating downside momentum, it seems not likely. Sustained trading below 73 will pave the way to a new all time low below 70.70 made in 2008.
On the data front, Australian PPI rose 1.2% qoq in Q1, above expectation of 1.0%. German IFO bushiness climate will be a feature in April and is expected to drop slightly to 110.5. UK retail sales is expected to drop -0.5% mom in March. Canada retail sales are expected to rise 0.5% mom in February. US initial jobless claims, house price index, leading indicators, Philly Fed survey will also be released.
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