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3 Dec 2014
NZD/USD circa 0.78, Fonterra/ USD strength weigh
FXStreet (Bali) - NZD/USD printed a new weekly low at 0.7786 before stabilizing circa 0.78, following another another disappointing Fonterra GDT auction, with prices down 1.1%, weighed mainly by whole milk powder, down by 7.1%.
While the Fonterra news prompted a flash 40+ pips sell-off in the Kiwi, the pair had been under pressure since early Europe, as the market reverted back to the familiar theme of broad-based USD strength, with commodity prices also on the back-foot not helping. In another piece of news worth noting, New Zealand's Q3 residential building work came down 0.7%, representing the largest decline in over 2 years, according to Stats NZ, an outcome that will probably ease even further the pressure to raise rates by the RBNZ.
Technically, Jim Langlands, Founder at FXCharts, notes: "The Kiwi is likely to again track the Aud today in the absence of any local data, and below 0.7784 would head towards the recent low at 0.7765 and then to 0.7735 (76.4% of 0.7660/0.7874). Under there would see a run down to the 11 Nov low at 0.7712 and eventually to the trend low at 0.7660. On the topside, minor resistance lies at 0.7820, above which the 100/200 HMA’s lie at around 0.7850."
While the Fonterra news prompted a flash 40+ pips sell-off in the Kiwi, the pair had been under pressure since early Europe, as the market reverted back to the familiar theme of broad-based USD strength, with commodity prices also on the back-foot not helping. In another piece of news worth noting, New Zealand's Q3 residential building work came down 0.7%, representing the largest decline in over 2 years, according to Stats NZ, an outcome that will probably ease even further the pressure to raise rates by the RBNZ.
Technically, Jim Langlands, Founder at FXCharts, notes: "The Kiwi is likely to again track the Aud today in the absence of any local data, and below 0.7784 would head towards the recent low at 0.7765 and then to 0.7735 (76.4% of 0.7660/0.7874). Under there would see a run down to the 11 Nov low at 0.7712 and eventually to the trend low at 0.7660. On the topside, minor resistance lies at 0.7820, above which the 100/200 HMA’s lie at around 0.7850."