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NZD/USD: Bounces off 0.77 but plenty of intraday sellers
FXStreet (Bali) - NZD/USD was given an early boost off 0.77 support in Asia, worth some 20/25 odd pips, although the price has quickly encountered intraday sellers at the 20-hourly EMA circa 0.7735/40.
Kiwi's poor performance on Monday was a combination of being dragged lower by a heavy AUD and broad-based USD strength. While we recently had some positive news out of New Zealand, with China lifting the ban to Fonterra's whey products, the negative sentiment towards the NZD makes the market find any little excuse to sell the currency again, hence no surprise to see exacerbated down moves after a soft China official PMI data over the weekend. Besides, an upbeat US ISM manufacturing report (56.6 to 59.0 in October) made the USD allure increase further.
Today's NZD volatility will most likely follow AUD's tail, set to be main mover on Australia's busy calendar, including retail sales, revision to Aus labour estimates for 2013-2014 and the RBA monetary policy decision. Technically, the market remains in a clear 'sell strength' mode, especially with the RBNZ having dropped its tightening bias last week, making further rate hikes more NZ data dependent now.