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NZD/USD Breaks Fibo Support To Lodge New Cyclical Low

NZD

NZD/USD traded with a bearish bias Monday and showed at a new cycle low as the kiwi underperformed all its G10 peers, while AUD/NZD soared to its best levels since Mar 2016.

  • The rate moved in sync with the BBDXY index in the first half of the day, but failed to match the pace of the sharp pullback in broader greenback strength into the WMR fix.
  • Equity benchmarks wobbled post-Asia, with main U.S. indices eking out gains and the VIX index losing altitude. On the commodity front, the aggregate BCOM index round tripped from a new two-month low to finish barely changed.
  • AUD/NZD turned bid amid a jump in Australia/New Zealand 2-Year swap spread, as Westpac boosted their RBA rate-hike call. The pair rallied to NZ$1.1294, the highest point since Mar 23, 2016, piercing resistance from the 2017 high in the process.
  • NZD/USD last trades at $0.5964, up 5 pips on the day. The rate probed the water under $0.5941, the 76.4% retracement of the 2020-2021 rally, bottoming out at $0.5930. Next firm support is at $0.5844, the low print of Apr 3, 2020. Bulls see Sep 13 high of $0.6161 as their initial target.
  • Looking into domestic data docket, NZ credit card spending will cross the wires Wednesday, with trade balance & Westpac Consumer Confidence coming up Thursday. Elsewhere, RBNZ Dep Gov Hawkesby will speak Thursday.
  • Outside of NZ, the PBOC's LPR fixing and minutes from the RBA's Sep policy review may provide some interest today.
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NZD/USD traded with a bearish bias Monday and showed at a new cycle low as the kiwi underperformed all its G10 peers, while AUD/NZD soared to its best levels since Mar 2016.

  • The rate moved in sync with the BBDXY index in the first half of the day, but failed to match the pace of the sharp pullback in broader greenback strength into the WMR fix.
  • Equity benchmarks wobbled post-Asia, with main U.S. indices eking out gains and the VIX index losing altitude. On the commodity front, the aggregate BCOM index round tripped from a new two-month low to finish barely changed.
  • AUD/NZD turned bid amid a jump in Australia/New Zealand 2-Year swap spread, as Westpac boosted their RBA rate-hike call. The pair rallied to NZ$1.1294, the highest point since Mar 23, 2016, piercing resistance from the 2017 high in the process.
  • NZD/USD last trades at $0.5964, up 5 pips on the day. The rate probed the water under $0.5941, the 76.4% retracement of the 2020-2021 rally, bottoming out at $0.5930. Next firm support is at $0.5844, the low print of Apr 3, 2020. Bulls see Sep 13 high of $0.6161 as their initial target.
  • Looking into domestic data docket, NZ credit card spending will cross the wires Wednesday, with trade balance & Westpac Consumer Confidence coming up Thursday. Elsewhere, RBNZ Dep Gov Hawkesby will speak Thursday.
  • Outside of NZ, the PBOC's LPR fixing and minutes from the RBA's Sep policy review may provide some interest today.