JPY

NZ GDP q/q and Australian employment data is our focus on the docket this week in the New Zealand Dollar (NZD), Australian Dollar (AUD) cross. The NZD continues to weaken off towards 0.9175 (1.0900) numbers into Tuesday possibly due to speculation that the Reserve Bank of New Zealand could cut rates 50 points In October instead of earlier expectations of 0.25%. Also, of note is a decline in NZ home sales adding to the NZD sell off. With NZ GDP publishing Thursday around -0.4% for the second quarter this should put further pressure on the NZD. Australian jobs data prints Thursday and should be benign, however if the unemployment rates print worse than 4.2% amid cooling inflation this could bring forward rate cut projections and dampen AUD hawks.

Current Level: 0.9170
Resistance: 0.9275
Support: 0.9075
Last Weeks Range: 0.9179 – 0.9288

The New Zealand Dollar (NZD) ticked lower to end the week around 0.6150 against the US Dollar (USD) perhaps the decline in NZ home sales may have dragged down the kiwi. Into Tuesday morning things are looking better for risk currencies with the NZD making back earlier losses to the 0.6200 level. Odds of a bigger cut to the OCR have increased to around 50% of a 50-point drop in October, we expect to see the NZD capped around the 0.6230 this week. We have a lot of economic releases over the week including The Fed interest rate release predicted to dip from 5.50% to 5.25%.

Current Level: 0.6195
Support: 0.6120
Resistance: 0.6240
Last week’s range: 0.6105- 0.6192

The Australian Dollar (AUD) dropped to 0.6020 (1.6620) Friday against the Euro (EUR) after succumbing to a risk off market tone in the wake of global recession risks. It has bounced back Monday to 0.6040 (1.6560) and should improve if commodity markets correct higher over the week. The European Central Bank (ECB) announce their cash rate Friday night and are widely predicted to drop their interest rate from 4.25% to 3.65% or 50 points following their 25-point cut in June. Eurozone inflation is certainly improving, cooling from 2.6% in July to 2.2% in August. We fancy a retest of support at the 0.6100 (1.6400) level.

Current Level: 1.6586
Resistance: 1.6700
Support: 1.6450
Last Weeks Range: 1.6281- 1.6626

The Australian Dollar (AUD) dropped to 0.6020 (1.6620) Friday against the Euro (EUR) after succumbing to a risk off market tone in the wake of global recession risks. It has bounced back Monday to 0.6040 (1.6560) and should improve if commodity markets correct higher over the week. The European Central Bank (ECB) announce their cash rate Friday night and are widely predicted to drop their interest rate from 4.25% to 3.65% or 50 points following their 25-point cut in June. Eurozone inflation is certainly improving, cooling from 2.6% in July to 2.2% in August. We fancy a retest of support at the 0.6100 (1.6400) level.

Current Level: 0.6029
Resistance: 0.6080
Support: 0.5990
Last Weeks Range: 0.6014- 0.6142

Momentum in the British Pound (GBP) continues through last week off 0.5170 (1.9350) areas against the Australian Dollar (AUD) to reach 0.5075 (1.9700) in overnight trading. Risk flows have favoured safe haven currencies since last week’s US Non-Farm Payroll release raising questions around global growth concerns. Moving averages are signalling further pain for the AUD after clearing the 0.5130 (1.95) zone, we expect downside moves to dominate price action this week.

Current Level: 1.9642
Resistance: 1.9800
Support: 1.9520
Last Weeks Range: 1.9340- 1.9686

The New Zealand Dollar (NZD) was looking good 10 days ago when it posted a 7-week high of 0.5665 (1.7650) against the Euro (EUR). It’s been all downhill since for the NZD retracing moves to 0.5550 (1.8030) Monday- most of this based on risk averse sentiment and downgraded global forecasts. Key Fib levels are signalling possible moves back towards a retest of the 23.6% resistance point at 0.5600 (1.7865), however most off this will depend on Friday’s European Central Bank (ECB) cash rate announcement when markets expect the ECB to cut from 4.25% to 3.65% resuming its easing policy from the high at 4.50% in April.

Current Level: 1.7982
Resistance: 1.8120
Support: 1.7670
Last Weeks Range: 1.7663 – 1.7984

The New Zealand Dollar (NZD) was looking good 10 days ago when it posted a 7-week high of 0.5665 (1.7650) against the Euro (EUR). It’s been all downhill since for the NZD retracing moves to 0.5550 (1.8030) Monday- most of this based on risk averse sentiment and downgraded global forecasts. Key Fib levels are signalling possible moves back towards a retest of the 23.6% resistance point at 0.5600 (1.7865), however most off this will depend on Friday’s European Central Bank (ECB) cash rate announcement when markets expect the ECB to cut from 4.25% to 3.65% resuming its easing policy from the high at 4.50% in April.

Current Level: 0.5561
Support: 0.5520
Resistance: 0.5660
Last week’s range: 0.5560- 0.5661

The New Zealand Dollar (NZD) has moved off lant week’s high at 0.4740 (2.1100) to post 0.4685 (2.1350) last night against the British Pound (GBP) as risk currencies were hit hard off the back of US jobs data. Overnight trading improved the kiwi slightly to 0.4710 (2.1240) as sentiment corrected. UK Construction came in light at 53.6 vs 54.6, despite this the number was seen as positive with sustained increase to business output although the pace of expansion will take time. UK Monthly GDP prints Friday with growth of 0.2% expected considerably better than July’s 0.0%. Risk flows will decide direction in the cross this week.

Current Level: 2.1299
Resistance: 2.1470
Support: 2.1000
Last Weeks Range: 2.099- 2.1297

The New Zealand Dollar (NZD) has moved off lant week’s high at 0.4740 (2.1100) to post 0.4685 (2.1350) last night against the British Pound (GBP) as risk currencies were hit hard off the back of US jobs data. Overnight trading improved the kiwi slightly to 0.4710 (2.1240) as sentiment corrected. UK Construction came in light at 53.6 vs 54.6, despite this the number was seen as positive with sustained increase to business output although the pace of expansion will take time. UK Monthly GDP prints Friday with growth of 0.2% expected considerably better than July’s 0.0%. Risk flows will decide direction in the cross this week.

Current Level: 0.4695
Resistance: 0.4760
Support: 0.4660
Last Weeks Range: 0.4695- 0.4764

The New Zealand Dollar (NZD) continues its bull run higher from the 8 August level of 0.9050 (1.1050) against the Australian Dollar (AUD) reaching 0.9285 (1.0770) into early morning trading. The AUD fells sharply on last week’s disappointing GDP data following a release of 0.2% in the June quarter confirming signs of economic stagnation. The poor growth was largely due to rises in govt funding and tax benefits. Except for covid it’s worth noting that 0.2% growth represents the worse print since quarter 1 in 2011. The RBA now have questions to consider with regards to rising inflation and policy. Chances of no change from the interest rate of 4.35% on the 24th of this month is at 90%. We expect the Aussie to gain on the kiwi this week

Current Level: 1.0838
Resistance: 1.1000
Support: 1.0720
Last Weeks Range: 1.0795 – 1.0904