Boris and Kathy's FX Blog www.bktraderfx.com
9/26/2006
Time for a Meltdown in Kiwi
The strong currency is finally catching up to the New Zealand dollar. We had horrid trade numbers last night - the second in a row. Finance Minister Cullen was on the wires late afternoon squashing rate hike expectations. Expressing his sharp distaste for the rise in the kiwi, Cullen said that the upmove was primarily driven by speculative hedge funds and warned that investors should not rule out a drop to 40 cents. Though thats a bit far fetched, his comments that rates could remain unchanged until 2008 are not. Fundamentals call for more weakness in the kiwi as do technicals. The chart below indicates that the NZD/USD's uptrend failed right at prior support turned resistance and a key fibo level. A move to .6425 looks like a possible next step.
The strong currency is finally catching up to the New Zealand dollar. We had horrid trade numbers last night - the second in a row. Finance Minister Cullen was on the wires late afternoon squashing rate hike expectations. Expressing his sharp distaste for the rise in the kiwi, Cullen said that the upmove was primarily driven by speculative hedge funds and warned that investors should not rule out a drop to 40 cents. Though thats a bit far fetched, his comments that rates could remain unchanged until 2008 are not. Fundamentals call for more weakness in the kiwi as do technicals. The chart below indicates that the NZD/USD's uptrend failed right at prior support turned resistance and a key fibo level. A move to .6425 looks like a possible next step.
posted by BKTrader # 9/26/2006 03:31:00 PM 
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