I’m sure Eamonn is already brewing up the analysis of tonights retail data so I’m not going to step on his toes with that.
I will have a look at the currency however, and see what’s on the cards for the kiwi.
NZD/USD has held a strong support level at 0.8410/15 and it is looking good for a potential double bottom.
NZD/USD Daily chart 13 08 2014
We’re currently trading between the support and 200 dma and while we keep closing below the moving average the sellers will be encouraged. At some point something will give. Looking a bit wider the downside line in the sand looks to be 0.8395/400 area below and the 0.8520/25 area above. A break in either will open the door to a more sustained move.
AUD/NZD is another pair that will see some reaction and it’s still not finding the legs to make a break higher. Support is coming in at the low 1.0900’s but the old Dec 2005 support line and channel top are keeping the cross shackled in.
AUD/NZD Weekly chart 13 08 2014
What could be encouraging is that there’s a possibility of closing the week above the 55 wma and that might add enough to the tank to see a push higher through 1.10.
We also have the BNZ manufacturing PMI which is looking to reinforce the the bounce to 53.3 last month from the May & 2014 low at 52.6.
With rates taking a back seat now we’re back to trading the data in greater detail. With the milk prices being the biggest cause for concern any other positive economic data may be short lived as far as price moves go. With USD strength still hanging about the kiwi may suffer more so than the mob across the water if that increases. I like the short side for a trade but I’m not really interested until we get into 0.8600