The euro is caught between the political risk in Europe, particularly France, and the prospect of a first rate cut in the United States before the end of the year. The euro has fallen sharply against sterling and the Nordic currencies (NOK and SEK). As for the EURUSD, after breaking out at the bottom of its uptrend since April at 1.0790, the currency rebounded sharply on the release of the US CPI. However, no significant upward resistance has yet been crossed. We'll be watching for an initial technical threshold at 1.0840, before continuing downwards towards the latest lows at 1.0600. In parallel, the dollar index (DXY) is holding firm above 103.90, the breach of which would be the only way to send the currency back into a downtrend.


As for commodity currencies, the current situation can best be summed up as a case of "all over the place, ball in the center". The aussie hit resistance at 1.6700 after bouncing off the bottom of its horizontal channel at 0.6578. We'll be keeping an eye out for a breakout above either of these levels to boost momentum. The kiwi has also held up well on its support zone at 0.6110/00 and is again testing its intermediate resistance at 0.6200/20, a level which must be breached to allow the current upward momentum to continue. As an aside, the Canadian dollar is beginning to feel the effects of the rate cut, particularly against the aussie and kiwi. The AUDCAD remains well above 0.9048, with a target of around 0.9500, while the NZDCAD is now above 0.84, the resistance level it has held since the summer of 2023.