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Range-Bound, Remains Slightly Heavy

AUSSIE-KIWI

The combination of a lack of concern with the exchange rate communicated by RBNZ Gov Orr & Australia's below-forecast GDP data weighed on AUD/NZD yesterday, pushing it to worst levels in almost a month.

  • AUD/NZD probes the water just below neutral levels, last trades -5 pips at NZ$1.0833. A move through the 23.6% retracement of the Mar 18 - Aug 18 rally/50-DMA at NZ$1.0797/86 would support the bearish case, opening up Aug 3 low of NZ$1.0718. Conversely, a rebound above Sep 1 high of NZ$1.0960 would give bulls the green light for targeting the round figure/Aug 24 high of NZ$1.1000/03.
  • Final Australian CBA Services & Composite PMIs both improved vs. the flash readings, but stayed below the break-even 50.0 level.
  • Focus moves to Australian trade balance & China's Caixin Services/Composite PMIs.

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