By DailyFX – USDCHF.Dollar Bears Come Out Of Hibernation. Further dollar bearishness plagued the greenback during the session as positive factory order figures played into… … the hands of skeptics.

Rising 2.5 percent on the month, U.S. factory orders were bolstered by
increased orders of civilian aircraft. However, when excluding the
volatile component, overall orders remained unchanged. This would be
the fourth time in five months where there has been little to no growth
in the figure and suggestive of nascent sluggishness. Coupled with
yesterday's disappointing manufacturing activity report, sentiment is
beginning to mount of an overall slowdown which may signal the end of
the current tightening cycle. Already pricing in a 25 basis point rate
hike in January, traders may not be so convinced of further rate hikes,
prompting short term weakness.

Technically Speaking
Continuing the bearish momentum from yesterdays break of the previous
consolidation, the USDCHF currency pair has rocketed through the last
line of support at 1.2850 and looks to close below the support floor at
1.2771. As a result, further bearish momentum looks to continue in the
longer term, but for now, the price action may be ripe for a small
retracement before further downward pressure. First tests would be the
1.2800 round figure with the 1.2844 (23.6 percent fib level from the
recent bear wave). Capping looks to hover 1.2912 (38.2 percent fib from
the aforementioned wave).

USDCAD

Data Aside, Commodities Drive Higher
Canadian dollar price action seemed unaffected by economic data as
regional inflationary data was less than exemplary. Industrial product
price for the month of November dipped 0.6 percent versus expectations
of a milder dip by 0.5 percent. The raw material price index report
fared the same declining 1.7 percent in the month. The data, suggestive
that inflation remains rather tamed in the economy, may lead central
bankers in considering leaving the current overnight rate at 3.25
percent. Policy makers began raising interest rates mid year in order
to remain preventive against such forces. However, given the economy
still churns ahead, as consumers remain thrift averse, Governor David
Dodge remains vigilant and may raise interest rates one more time rather
than being sorry. Subsequently, loonie demand looks to be bolstered by
correlations with crude oil and fundamental aspects have led lots of
speculative money to boost the front month contract higher above $63 a
barrel.

Technically Speaking
In similar fashion, the downtrend continues from the previous textbook
double top seen in the month of December. However, nearing a formidable
floor at 1.1452, the current bear assault may be temporariliy halted.
The first topside resistance resides at the 1.1500 figure and 1.1554
(61.8 percent fib from the December bear wave). Formidable barriers
hover the 1.1425 figure (December 14th spike low).

AUDUSD

Copper Soars, Assists The Aussie
With no economic data, traders continue to bid the Australian major
against the U.S. on a mildly dovish tone in yesterday's Fed meeting
minutes. Although growth in the economy continues to be suggestive of a
plateau, traders cannot deny the fact that the currency pair still
offers a small carry. With U.S. Fed officials speculated to stop
raising interest rates, the carry would still offer the most interest
only trader a 1 percent differential. Price action looks to
additionally be fueled by gains in metal based commodities. Notably,
copper price continue to hover record highs, temporarily hitting $2.11
before retracing slightly in the U.S. session. With the economy a
provider to the world's demand higher copper prices would definitely
benefit exporters and hopefully contribute to further growth.

Technically Speaking
Breaking through resistance at 0.7453, the price action continues to
look positively biased. However, before approaching the longer term
trend line beginning in early 2005, short term momentum may be subject
to consolidation prior to further upsides. Textbook Fibonacci levels
are in place providing floors at 0.7453 (61.8 percent fib ffrom the two
week bear wave) and 0.7412 (50 percent fib from the aforementioned
wave).

Richard C. Lee
Forex Capital Markets LLC
Financial Square
32 Old Slip 10th Floor
New York, NY 10005
Tel (212) 897-7660
Fax (212) 897-7669
By DailyFX

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