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Since early March commodity-related currencies like the Aussie, Loonie, and Kiwi have been relentless in their gains against the Greenback. Are the major factors that influenced their rallies still valid today?

1. Wherefore art thou, positive economic reports?

Before the end of 2012 the forex community was peppered with forecasts that the Reserve Bank of Australia (RBA) and the Bank of Canada (BOC) would further loosen their monetary policies to support their economies. But lo and behold the central banks had actually stayed put since then!

If you take a look at the reports released from Australia, Canada, and New Zealand since early March, you’ll see why the central banks found it prudent to hold off from more stimulus. Australia and Canada’s employment numbers were the envy of the G10 countries, Canada and New Zealand’s GDP figures were flashing green growth rates, while China’s major reports were beating expectations.

Unfortunately, the comdoll countries couldn’t sustain their positive news. Recent employment reports from Australia and Canada canceled out almost all the job gains in February and now China’s PMIs, inflation, and trade data are all in the red. Does this mean that the tides are changing for commodity-related economies?

2. The euro is back in the game

Last month investors had dumped the euro like there was no tomorrow when Cyprus suddenly faced serious bank run threats. And with the Fed, BOJ, and SNB busy playing the “my stimulus is bigger than your stimulus” game and the U.K. printing horrendous reports, the high-yielding comdolls had stood out as good alternative investments.

Today threats of Cyprus being booted off the currency block has somewhat diminished. Even peripheral bond yields are approaching multi-year lows. More importantly, it looks like market players are shrugging off the region’s debt problems for now and are focusing on the U.S. economy as well as the BOJ’s stimulus plans.

If economic data from China, Australia, Canada, and New Zealand continue to disappoint expectations, then it won’t be long before traders start unwinding their comdoll positions in favor of the European currencies.

3. Technical levels have already played out

Looking at the daily charts of AUD/USD, USD/CAD, and NZD/USD you’ll see that it was almost a no-brainer for position traders to buy the comdolls in early March. AUD/USD and NZD/USD were sitting at the bottom of long-term ranges while USD/CAD was also near a significant resistance level.

Since then the comdolls have gained around 300 pips against the Greenback. But right now AUD/USD is having trouble breaking above the top of its long-term range while USD/CAD is finding support at a potential Fibonacci retracement. Even NZD/USD, which has broken above .8500, is fast approaching another major resistance area.

Of course, you should take the signs above with a grain of salt. After all, one batch of bad economic reports does not translate to a weak economy and technical support and resistance levels can be easily broken. Use the signs above as guides to the major market themes that could influence comdoll trading and then conduct your own analysis to determine if these themes are changing anytime soon.