- NZD/USD: technically bid, but vulnerable to a correction in the Trump fuelled dollar sell-off.
- The end of the week’s highlights will be in focus while the dairy auction takes place in European markets today.
NZD/USD has been climbing in response to Trump’s alleged derogatory comments about Fed chairman Powell and dissatisfaction with the path that the Fed is on. This set the dollar lower and the commodity complex benefitted. The kiwi is currently trading at 0.6646 having made a US session high of 0.6649 and a low of 0.6610.
Headlines relating to US monetary policy and Trump’s apparent unhappiness about its path weighed do the greenback that fell from within a range of between 95.7630-96.4020. “But currency markets were generally otherwise quiet and remained in reasonably tight ranges. Those tight ranges are likely to hold today,” analysts at ANZ argued.
What is coming up?
In that regard, and given that the RBA minutes, nor Lowe, will give us any fireworks today, its all been a bot RBA overload of late, another dairy auction is due and the RBNZ’s soft target is WMP at $US3000/t, while the last outcome was a little below that. Other than that, it really is about the FOMC minutes and Jackson Hole later this week. The strength of the dollar is bound to surface over the events.
NZD/USD levels
Support is seen at 0.6510 while resistance is located at 0.6670. There is an argument for the upside while indicators have resurfaced from out of oversold territory and bulls can target resistance at 0.6670. Indeed, the 10-D SMA has been breached and closes above there open up the possibility of a stretch towards 0.6860 if 21-D SMA can be cleared. This guards territory towards 0.6920 as the June high can be had. The 200-month moving average resistance is at 0.7020. However, on the downside, 0.6510/50 guards a run to the 0.6470s and below there, 0.6240 remains as a big level that protecting the double bottom lows at 0.5910 (2004 and 2006 levels).
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