NZD/USD Makes New YTD Lows, Milk Prices Fall, GDP Tomorrow

NZD continued to trade off post the Asian session on Tuesday making new YTD lows of 0.6034 before recovering slightly into the close, the kiwi was down 0.54% only beaten by the JPY to be the worst performing G10 currency. New Zealand Milk auctions indictor has shown a decline, while WBC consumer confidence rises from the prior month. All eyes will be on tomorrows release of GDP.

• NZD/USD has opened Wednesday trading at 0.6052, off the lows made during the European session on Tuesday of 0.0634, while the pair traded in a 55-pip range. Initial resistance 0.6069 was broken and we comfortably closed below it. NZD/USD is now off 2.65% from its monthly highs, so it wouldn't be unexpected to see some form of pull-back heading into GDP data on Thursday.
• Key levels to watch: Initial support at 0.6034 (Mar 19 lows), a break here would open up a test of 0.6000 (Nov 23 lows). In the case of a pull-back, initial resistance holds at 0.6080 (Mar 18 lows), while above 0.6111 (200-day EMA)
• Earlier, NZ Consumer confidence rose to 93.2 vs 88.9 prior and current account deficit was 6.9% of GDP in the 12 months to Dec, vs a deficit expected of 7.0%, while current account deficit was NZ$7.837b vs. -NZ$7.80b est.
• GlobalDairyTrade weighted average price for milk products was $3,494 a ton falling 4.2%, the price of whole milk fell to $3,143 from $3,286, while Fonterra GDT price Index fell 2.8%.
• Looking ahead this week NZ GDP is due out tomorrow, while trade balance is due on Friday.