The Kiwi is Charging as We Get More Soft AUD Retail Data

The Kiwi has been the big mover of recent times and the move doesn’t appear to be slowing down any time soon.

So far today, the NZD/USD is up 0.5% and there could be more ahead.

The news that sparked the buying was that there is now a longer timeline for New Zealand banks to increase capital buffers. This is seen as a positive clearly and could turn into multiday buying.

So far the key 0.6500 has fallen and price is right under 0.6550. If that level can hold, then there is a big chance of some more upside. That won’t be easy though as we have already been quite extended so far this morning and even into yesterday.

More Bad AUD Data

For the second straight day, we’ve also seen some less than stellar economic data in Australia. Today, retail sales showed no improvement at 0.0% for the month. While trade balance data missed expectation.

The AUD/USD is understandably very soft in response. By rights, it should have sold a bit yesterday, but keeps getting held up by a weak USD.

So far the 0.6850 level looks like it might be a real stopping point and is providing plenty of resistance.

At the same time, if price can fall back under 0.6800 that to me would look very bearish from a technical perspective. In fact, the charts now look like we have made a double top at 0.6850 and that means we could see more downside ahead.

Both these data points are only strengthening the case for a further rate cut in Feb, which the market is now expecting to happen.

The only strong area in Australia is property prices and that’s the one thing the RBA doesn’t really want to see moving higher at the moment.