13 Jan 2015
NZD/USD: Outside day at top-end of range
FXStreet (Bali) - NZD/USD's startling recovery off sub 0.77 came to an abrupt end on Monday, resulting on a sizeable outside day which may mark the end of the corrective leg.
In terms of drivers, Fonterra's milk auctions continue to be a source of volatility for the Kiwi, which found support in the last results learned. Another uncertainty surrounding the NZD is whether or not the RBNZ will be able to maintain its hawkish bias amid global deflationary tendencies, with NZ CPI currently down to the bottom-end of the target range circa 1%.
Jim Langlands, Founder at FXCharts, notes: "The daily charts probably hold the key, where the topside is still capped by the failure to successfully take out the descending wedge (0.7845) and the daily cloud base (0.7830), which will continue to act as decent resistance. Ahead of these levels, it currently looks as though the Kiwi is going to struggle to regain 0.7800 today, although this will depend to a degree on the Chinese trade data."
In terms of drivers, Fonterra's milk auctions continue to be a source of volatility for the Kiwi, which found support in the last results learned. Another uncertainty surrounding the NZD is whether or not the RBNZ will be able to maintain its hawkish bias amid global deflationary tendencies, with NZ CPI currently down to the bottom-end of the target range circa 1%.
Jim Langlands, Founder at FXCharts, notes: "The daily charts probably hold the key, where the topside is still capped by the failure to successfully take out the descending wedge (0.7845) and the daily cloud base (0.7830), which will continue to act as decent resistance. Ahead of these levels, it currently looks as though the Kiwi is going to struggle to regain 0.7800 today, although this will depend to a degree on the Chinese trade data."