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Commodity Currencies Advance Against Majors

The commodity currencies such as the Australian, the New Zealand and the Canadian dollars strengthened against their major counterparts in the Asian session on Monday, as oil prices rose after Secretary of State Mike Pompeo said the United States would impose “significant” sanctions against Iran today following the downing of a U.S. drone last week.

Pompeo on Sunday accused Iran of “selling” false information concerning the attack on the U.S. drone over international waters.

He asserted that the United States is ready to negotiate with Iran with “no preconditions.”

He told that the U.S. is planning to impose “significant set” of new economic sanctions on Monday, but declined to offer more details.

In economic news, figures from Reserve Bank of New Zealand showed that New Zealand’s credit card spending growth slowed in May after rising in the previous month.

Credit card spending growth eased to 0.4 percent month-on-month in May from 0.6 percent in April.

The loonie climbed to 1.3182 against the greenback, 1.5004 against the euro and 81.49 against the yen, from its early lows of 1.3216, 1.5032 and 81.17, respectively. The next possible resistance for the loonie is seen around 1.30 against the greenback, 1.48 against the euro and 83.00 against the yen.

Reversing from its early lows of 0.6929 against the greenback, 0.9155 against the loonie and 74.34 against the yen, the aussie strengthened to near a 2-week high of 0.6961, 5-day high of 0.9181 and a 10-day high of 74.79, respectively. The aussie is likely to challenge resistance around 0.72 against the greenback, 0.94 against the loonie and 76.00 against the yen.

The aussie edged higher to 1.6347 against the euro, following a decline to 1.6412 at 11:45 pm ET. If the aussie rises further, 1.60 is likely seen as its next possible resistance level.

The kiwi appreciated to a 2-week high of 0.6615 against the greenback and a 4-day high of 71.06 against the yen, off its early lows of 0.6585 and 70.65, respectively. On the upside, 0.68 and 75.00 are possibly seen as the next resistance levels for the kiwi against the greenback and the yen, respectively.

The NZ currency gained to 1.7208 against the euro and 1.0519 against the aussie, coming off from its early low of 1.7270 and a 6-day low of 1.0550, respectively. The currency may test resistance around 1.68 against the euro and 1.03 against the aussie, if it rises again.

Looking ahead, German Ifo business sentiment index for June is due in the European session.

The material has been provided by InstaForex Company – www.instaforex.com