Just when it looked like bears may have been once again gaining the upper hand in the battle for AUDNZD, NZD got assaulted by soft dairy price data. The commodity currency was hit by a wave of sellers after a measure of dairy prices from GlobalDairyTrade (GDT) indicated there was significant weight on key dairy prices last month. The auction house stated that its price index fell 7.3% since the last index at the beginning of September, with the most downward pressure coming from products that contribute a significant portion of NZ’s export market.
While NZDUUSD didn’t break any important support zones on the back of the data, AUDNZD rebounded of a key support zone around its 38.2% retracement level from last month’s low. The pair is now testing an important resistance line (see chart) ahead of some important Australian economic data.
Australia’s August trade and building approvals figures are due out at 0130GMT, with the former expected to show a shrinking deficit (800m vs. 1359m) and the latter expected to have increased 1.0% over the month. Given yesterday’s weak retail data, another set of soft figures today could erase some of AUD’s flimsy overnight strength.
Source: FOREX.com
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