NZD/USD

Commodities Rise Again: The Kiwi dollar remained bid on the session as commodity demand remains healthy with speculation underpinned by further near term demand.  Although declines were witnessed across the board, declines were limited as prices still retained their lofty status.  As a result, traders bid the New Zealand dollar in conjunction with carry trade potential.  Currently the spread remains at 300 basis points.

Fundamentals Cast Aside: Comparatively, the U.S. dollar lost strength on the session in light of positive economic data.  For the month, factory orders to the world's largest economy rose 2.5 percent compared with consensus estimates of a 2 percent rise and reversing the decline seen in the previous period.  Suggestive that the economy remains underpinned in the wake of both Rita and Katrina, traders are already pricing in further tightening of interest rates in the next two months.  As a result, market players are concerned the current bullish greenback momentum could fade in the near term.

Rumorville: Bids reside at 0.6910/20 with offers hovering 0.6980/85.  Subsequent stops are above at 0.6970.

Technically Speaking: Little stands in way for the kiwi to continue a move higher.  If today's high is broken, an eventual push to the 61.8% fib at 0.6989 would be the first level to pressure a bullish move.  The 50% fib of the same monthly swing would be the first brake on dollar bids with stronger support resting down at 0.6888.

AUD/CAD
 
Battle Of The Commodities: With no scheduled economic release for either member of the pair, the market was left to look at commodity prices for their positions, with ever volatile and newsworthy crude prices catching traders' attention.  Dipping below $65 per barrel in trading today, loonie bulls took the news with a less than favorable tone.  Commodities account for nearly 35 percent of the countries exports and have carried the economy through a period of soft domestic demand.  While Australia benefits from the cheaper energy prices, Canada's future of strong growth and aggressive interest rate hikes may become suspect.

Technically Speaking: The strong move in the Aussie's favor pulled the pair through former resistance at 0.8940, but the 23.6% fib of the last loonie bullish swing tempered any more aggressive bidding.  While the near term support is relatively strong, resistance at 0.8815 will be harder to breach.  The level has held for two years and a brake will leave a loonie run unemcumbered.

EUR/CAD

Turkey Makes Its Bid For Membership: Turkey began its long, uphill battle to gain its entry into the illustrious European Union yesterday, which presently consists of a trim 25 nations.  Last minute objections by both Cyprus and Austria, however, have nearly knocked them off track before the ball even gets rolling.  Both countries cast a doubtful eye on the largely Muslim country with the average income of only a quarter of the average Union member's.  While admittance would be a drastic improvement for the hopeful, the Union would be further watered down.  The rocky start for Turkey offered euro traders hope that the community will not be weighed down by another third-world country, at least for a while.

Technically Speaking: Today's jump in the euro versus the loonie brings the pair to the upper band of a very steep downward channel.  If the euro can keep up with its strength, the next level to eye would be around 1.4060 where former support is offering new resistance.   Looking at the longer time frame, the pair has made a month long plunge to fresh 3-year lows, so a continuation downwards is more like.  Retesting of today's and yesterday's lows around 1.2850 will be the next level for another round of euro bids.

Richard Lee is a Currency Strategist at FXCM.