JPY

It has been a quiet start to the trading week with the US Holiday Monday making for thin market conditions. The New Zealand Dollar (NZD), US Dollar (USD) closed the week around the 0.6100 mark and has meandered its way into Tuesday around the same level. The kiwi does however look a little better bid post the big dollar recent rally. US Producer Prices turned in a flat monthly result but is up 1.8% y/y and follows other strong US data releases. The Fed is in the final stages of getting inflation back to 2.0% target, but the central bank seem uncertain of how restrictive monetary policy needs to be with the jobs market remaining strong. Focus diverts to NZ inflation tomorrow with expectations of further falls 3.3% to 2.3% q/q which could put extra pressure on the NZD. Upside moves look limited past 0.6140 levels.

Current Level: 0.6086
Support: 0.6050
Resistance: 0.6200
Last week’s range: 0.6051- 0.6193

The Australian Dollar (AUD) bounced hard off 0.6250 (1.60) long term resistance mid last week to give back gains to 0.6120 (1.6350) yesterday. Punching below key moving averages around 0.6160 (1.6230) we could see more downside develop. Also weighing on the AUD is Chinese stimulus concerns, rising oil prices and the conflict in Israel. The RBA minutes signalled a removal of their dovish tone by not saying they weren’t reducing the cash rate in the near term.

Current Level: 1.6291
Resistance: 1.6400
Support: 1.6000
Last Weeks Range: 1.6000- 1.6185

The Australian Dollar (AUD) bounced hard off 0.6250 (1.60) long term resistance mid last week to give back gains to 0.6120 (1.6350) yesterday. Punching below key moving averages around 0.6160 (1.6230) we could see more downside develop. Also weighing on the AUD is Chinese stimulus concerns, rising oil prices and the conflict in Israel. The RBA minutes signalled a removal of their dovish tone by not saying they weren’t reducing the cash rate in the near term.

Current Level: 0.6138
Resistance: 0.6250
Support: 0.6100
Last Weeks Range: 0.6178- 0.6250

All upside moves by the Australian Dollar (AUD) last week have been reversed this week with the cross turning on a dime around 0.5220 (1.9170) clocking 0.5140 (1.9470) this morning. Most of the Aussie weakness coming from risk sentiment and Chinese stimulus measures. Chinese equities have plummeted overnight over 7% not helping the AUD suffering the biggest drop in 4 years. UK m/m GDP prints tomorrow evening and should be positive following a recent pickup in manufacturing. 0.5120 (1.9520) is the next target support.

Current Level: 1.9459
Resistance: 1.9680
Support: 1.9320
Last Weeks Range: 1.9123- 1.9390

It’s been all one-way traffic in the New Zealand Dollar (NZD), Euro (EUR) cross this week extending off 1.7800 (0.5620) the weekly open to 1.8070 (0.5535) in morning trade the kiwi coming under enormous pressures after the RBNZ cut interest rates half a cent yesterday off 5.25% to 4.75%. The cut was widely predicted however although much of the downside momentum in the NZD was priced in, more sellers of NZD come forward post the release. On the chart the kiwi has slipped past prior support at 0.5555 (1.80) and could retest early July levels circa 0.5510 (1.8150) in the coming days. We haven’t seen much on the Euro calendar this week, much of the focus has been on the German govt updating their GDP forecast which is predicted to be a negative number when it prints at the end of this month.

Current Level: 1.8044
Resistance: 1.8120
Support: 1.7670
Last Weeks Range: 1.7481 – 1.7836

It’s been all one-way traffic in the New Zealand Dollar (NZD), Euro (EUR) cross this week extending off 1.7800 (0.5620) the weekly open to 1.8070 (0.5535) in morning trade the kiwi coming under enormous pressures after the RBNZ cut interest rates half a cent yesterday off 5.25% to 4.75%. The cut was widely predicted however although much of the downside momentum in the NZD was priced in, more sellers of NZD come forward post the release. On the chart the kiwi has slipped past prior support at 0.5555 (1.80) and could retest early July levels circa 0.5510 (1.8150) in the coming days. We haven’t seen much on the Euro calendar this week, much of the focus has been on the German govt updating their GDP forecast which is predicted to be a negative number when it prints at the end of this month.

Current Level: 0.5542
Support: 0.5520
Resistance: 0.5660
Last week’s range: 0.5606- 0.5720

The Kiwi attracted sellers in the wake of the RBNZ cut Wednesday after the RBNZ cut the interest rate from 5.25% to 4.75%. Price extended to 0.4630 (2.1585) clearing support around 0.4660 (2.1470), the lowest level since early August levels against the British Pound (GBP). Inflation in NZ sits at 3.3% y/y for the June quarter just above the 1-3% acceptable band. Seems the RBNZ are now convinced inflation is under control with convincing signs its rapidly approaching the mid zone around 2%. Markets are pricing in another 50-point drop at the November meeting which would take the interest rate to 4.25% giving more relief to borrowers and consumers. The cross looks to retest the yearly low at 0.4580 (2.1840).

Current Level: 2.1547
Resistance: 2.1880
Support: 2.1000
Last Weeks Range: 2.1000- 2.1311

The Kiwi attracted sellers in the wake of the RBNZ cut Wednesday after the RBNZ cut the interest rate from 5.25% to 4.75%. Price extended to 0.4630 (2.1585) clearing support around 0.4660 (2.1470), the lowest level since early August levels against the British Pound (GBP). Inflation in NZ sits at 3.3% y/y for the June quarter just above the 1-3% acceptable band. Seems the RBNZ are now convinced inflation is under control with convincing signs its rapidly approaching the mid zone around 2%. Markets are pricing in another 50-point drop at the November meeting which would take the interest rate to 4.25% giving more relief to borrowers and consumers. The cross looks to retest the yearly low at 0.4580 (2.1840).

Current Level: 0.4641
Resistance: 0.4760
Support: 0.4570
Last Weeks Range: 0.4692- 0.4762

The RBNZ delivered a 50-point cut to their interest rate yesterday as predicted sending the New Zealand Dollar (NZD) lower across the board and towards 0.9020 (1.1085) against the Australian Dollar (AUD). We have been suggesting for several weeks now how the kiwi looks overvalued. Turns out we have been correct; prices could drop into the high 80’s prior to the weekly close. Also factoring in another 50-point cut by the RBNZ at their late November meeting we could see the NZD continue to sell off.

Current Level: 1.1066
Resistance: 1.1150
Support: 1.1030
Last Weeks Range: 1.0864 – 1.1048

The RBNZ delivered a 50-point cut to their interest rate yesterday as predicted sending the New Zealand Dollar (NZD) lower across the board and towards 0.9020 (1.1085) against the Australian Dollar (AUD). We have been suggesting for several weeks now how the kiwi looks overvalued. Turns out we have been correct; prices could drop into the high 80’s prior to the weekly close. Also factoring in another 50-point cut by the RBNZ at their late November meeting we could see the NZD continue to sell off.

Current Level: 0.9029
Resistance: 0.9070
Support: 0.8970
Last Weeks Range: 0.9051 – 0.9204