FED: VC Bowman: Addressing Inflation The Right Move For Fed

The NZD/USD had a range Friday night of 0.5601 - 0.5621, Asia is currently trading around 0.5605, -0.15%. The pair has come back under some early pressure as the Middle-East flares up, moving back toward 0.5600. Like the AUD though it has been unable to really build any real momentum lower in recent weeks. There has been some decent demand toward the 0.5500 area since 2020 and it would take a sustained push below there to see the bears look for another leg lower. While below 0.5700-0.5750 the trend remains lower though albeit a little stretched. Initial resistance is toward 0.5630-0.5660 and above there the 0.5700-0.5750 area comes back into play. Can we see another test of the lows or does this inability to move lower suggest a potential reversion back to the mean that would offer better levels to enter a short ?                

• “Riyadh’s King Khalid International Airport came under fresh attack from the Houthis a day after a strike on the hub killed 12 people, demonstrating the Yemeni militants’ ability to reach the heart of Saudi power. King Fahd International Airport in Dammam was also targeted.” - BBG
• CFTC Data up to 06/10/2026 shows Asset Managers are quickly rebuilding their core shorts, -32 534(Last -21 228). The Leveraged community remains sidelined after being squeezed out of its shorts, -1 214(Last -1 454) and are not being so quick to jump back in.
• Options : Closest significant option expiries for NY cut, based on DTCC data:  none. Upcoming Close Strikes : 0.5760(NZD386m Oct 13), 0.5790(NZD466m Oct 15) - BBG
• The NZD/USD Average True Range for the last 10 Trading days: 35 Points

Fig 1: NZD CFTC Data

Source: MNI - Market News/Bloomberg Finance L.P

Source: Bloomberg Finance L.P./MNI 

The AUD/USD had a range Friday night of 0.6968-0.6989, Asia is currently trading around 0.6974, -0.13%. The pair has come under early pressure as the Middle-East flares up again over the weekend. This has seen the pair top out again back toward the 0.7000 area. The AUD has been unable to really gather any real momentum lower but with this setup I would probably still be skewed toward fading rallies. The first resistance is back toward 0.6985-0.7015 and then the 0.7050-0.7100 area comes back into play. I will be watching to see if the AUD can build on this break back below 0.7000, looking for a test of the pivotal 0.6800-0.6850 support at some point. 

• “Australia said purchases of Russian fuel will remain barred so Putin doesn’t benefit from invading Ukraine.” - BBG
• US/UKRAINE/RUSSIA: Trump Says Russia and Ukraine Agreed to ‘Energy Ceasefire’ (Bloomberg) -- President Donald Trump said Sunday that Russia and Ukraine have agreed to an “energy ceasefire” effective immediately. “Both parties have agreed. Do not break it!” he wrote on social media.
• CFTC Data up to 06/10/2026 shows Asset managers continuing to add agressively to their shorts -101 309(Last -73 073). The Leveraged community continues to pare back though their position remains core long, +48 911(Last +54 114).  
• Options : Closest significant option expiries for NY cut, based on DTCC data:  0.6825(AUD515m). Upcoming Close Strikes : 0.6885(AUD549m Oct 14), 0.6950(AUD5740m Oct 13) - BBG
• The AUD/USD Average True Range for the last 10 Trading days: 37 Points

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P