FX Board: Silver streaks higher as EUR takes a dive

• EURUSD support at 1.12 in focus

• Silver surges to top of three-month range

• AUD soft ahead of RBA meeting

Silver grew wings today as the commodity currencies (save the AUD) rallied and the EUR battled higher before taking an ungraceful dive.

Today's key FX developments

• The euro was all over the map today, first surging higher versus the US dollar and especially the Japanese yen in early trading before reversing hard against both currencies coming into the US hours.

• AUD was weak, even amid strong risk appetite and an enthusiastic rally in CAD and NZD as traders perhaps fear a dovish performance from the Reserve Bank of Australia at tonight's meeting.

• CHF notably remains toward the weak side of the local range versus the euro today despite the EUR trading generally weakly elsewhere later today. This suggests that while there is no apparent safe-haven bid in the franc, there may be a tendency for the currency to weaken when risk sentiment turns more positive.

• Gold remains elevated after Friday's strong performance, and silver really leaped into action today, powering all the way to the top of the three-month range and setting up a test of an interesting zone of resistance (if it continues higher) that could have structural implications.

EURUSD

EURUSD saw an odd double pump and dump since Friday; it seems the local support around 1.1200 is the immediate focus, though we really need to see a breakdown below 1.1100 to get things going again for the bears as we need to work out of this local range.

USDJPY

USDJPY saw a very solid bounce from the lows on Friday amid the renewed surge in risk sentiment, which is obviously key for the pair. This marks too many reversals to continue counting them for now as we look for a close either above the 121.25 area or below 119.00. Note that the Bank of Japan makes an announcement on Wednesday.

AUDNZD

Focus on AUD crosses ahead of the RBA tonight and we have this one through the important 1.0900 area, theoretically opening up for the 1.0750 area eventually if the RBA waxes a bit dovish. In the end, though, we are still looking at this as a counter-trend consolidation that eventually yields to a new rally.

XAGUSD

Silver ripped higher on the day and all the way to the top of the 3-month range above $15.50/oz. A continuation of this rally begins to have structural implications, especially if we can continue to power higher (without steep retracements) back above the 200-day moving average currently near $16.00/oz.