NZD: NZD/USD - Treads Water In A 0.5750-0.5810 Range
The NZD/USD had a range overnight of 0.5759 - 0.5788, Asia is trading around {NZD Curncy}. A surprisingly low US CPI and all the market's worries are over. Risk reversed higher overnight as the market believes US rate cuts are on their way. Some doubt exists around the validity of the CPI though and how the shutdown has affected the data. The NZD is consolidating its gains above 0.5700-0.5750 and for the most part has been left unscathed by the choppy price action seen elsewhere. On the day, I suspect more of the same unless the BOJ offers a surprise, support is back toward 0.5740-0.5760 and resistance is around 0.5810-30.
- Bloomberg - “US Bond Market Needs to Wait a Month For Clean Inflation Data. Missing a single month of data collection has created a statistical distortion to the shelter component of CPI that promises to artificially lower the inflation figure for months to come. Lower shelter costs may help boost bond prices, at least until December PCE data come out in late January.”
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.5630(NZD594m), 0.5750(NZD459m), 0.5875(NZD410m). Upcoming Close Strikes : 0.5530(NZD475m Dec 23), 0.5780(NZD324m Dec 22) - BBG
- The NZD/USD Average True Range for the last 10 Trading days: 38 Points
- Data/Event: GDP
Fig 1: NZD/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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MNI: US TSY TICS NET FLOWS IN SEP +$190.1B
- MNI: US TSY TICS NET FLOWS IN SEP +$190.1B
- US TSY TICS NET L-T FLOWS IN SEP +$179.8B
USDCAD TECHS: Bearish Theme
- RES 4: 1.4200 Round number resistance
- RES 3: 1.4170 Channel top drawn from Jul 23 low
- RES 2: 1.4140/67 High Nov 5 / 50.0% of the Feb 3 - Jun 16 bear leg
- RES 1: 1.4062 Intraday high
- PRICE: 1.3996 @ 16:45 GMT Nov 18
- SUP 1: 1.3985 Low Nov 13
- SUP 2: 1.3968 50-day EMA
- SUP 3: 1.3893 Bull channel base drawn from the Jul 23 low
- SUP 4: 1.3888 Low Oct 29 and a key support
The short-term outlook in USDCAD is bearish. Price action is trading inside a bull channel drawn from the Jul 23 low. The top of the channel - currently at 1.4170 - provided a firm resistance on Nov 11. The subsequent move down highlights scope for a bear extension towards the base of the channel at 1.3893. Initial key support to watch is 1.3968, the 50-day EMA. For bulls, a break of the channel top would confirm a resumption of the uptrend.
AUD: AUD/USD - Support Toward 0.6450 Holds As Risk Stabilises
The AUD/USD had a range overnight of 0.6474-0.6518, Asia is trading around 0.6510. Risk has stabilised overnight recovering off its lows albeit ending lower on the day. The AUD/USD again found very good support back toward the 0.6450 area and has moved back above 0.6500 as US stocks recover into the close. Bitcoin had a look below the pivotal $90k area and strong demand has seen the support hold on the first attempt, the markets focus for risk will now turn toward the Nvidia results which come out in the US session. The AUD/USD continues to chop around within its 0.6350-0.6650 range, its first support back toward 0.6440-0.6460 which has been pretty solid the last couple of months, then 0.6350 below that. It would need this move lower in risk to accelerate and become something more significant to challenge down there I would think.
- MNI BRIEF:RBA Outlines Factors That Will Drive Pause - Minutes. Stronger demand, reduced supply capacity and signs that the 3.6% cash rate may not be as restrictive as previously thought could lead the Reserve Bank of Australia to hold rates at coming meetings, minutes of the Board’s November session showed Tuesday.
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD640m), 0.6300 (AUD445m). Upcoming Close Strikes : 0.6550(AUD2.28b Nov 21) - BBG
- The AUD/USD Average True Range for the last 10 Trading days: 48 Points
- Data/Event: Westpac Leading Index, Wage Price Index
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
