The New Zealand dollar continues to come under the pressure and the most recent pullback on the charts looked all the more weaker as strong technical's and fundamentals came into force. Australia continues to also weigh heavily on the NZDUSD as the NAB business confidence index came in at 3 (previous month's reading was 5) showing once again there is a lack of confidence in a recovery from the Australian economy and this certainly carries over in to the New Zealand one as well. As China and Australia are New Zealand's two largest trading partners, this is of course will have a long term impact on the New Zealand economy.
Large movements higher on the charts have been whacked down by the 20 day moving average, which has so far looked to punish any bulls coming back into the market. And while the bears may be in control it seems all the more unlikely that they can crash through the 0.6379 level at this point as the market continues to find itself requiring a catalyst for breaking major levels as we have seen in the past. Any large break out past 0.6379 is likely to find stiff support at 0.6354 and even here I would be surprised to see real genuine momentum as the NZDUSD is always a popular traders looking for risk and fixed interest returns in a world with very little at present.
Oil (WTI) markets are also looking all the more prevalent as per usual as we saw a strong rally before the week closed out, as traders looked to make the most of a weaker USD. Despite all of this the fundamentals continue to remain in favour of the oil glut as oil rigs continue to stay open and pump even in the face of very low prices. Even with all the talk of Iran opening its oil up to the world the real concern still comes from the US where even in the face of falling prices they continue to pump. However, it is a matter of time before US oil takes a hammering as cash levels are dropping and debt levels are certainly causing headaches.
Despite all of this I still feel the bears are very much in control and the weighting game is all about how low in the $20.00 dollar barrel range we can go. For me the answer is found at support at $24.74 which seems like an ambitious target at present, however, I feel it is relevant given the fact that oil prices continue to be downgraded by large investment banks and also the fact that global demand keeps slipping.
Lastly, the EURGBP has become an interesting trade to watch as it continues to gather speed with the bulls on a weakening UK economy. The prospect of further stimulus has got the Euro traders moving and the UK economy continues to find weakness in its manufacturing sector, which is slipping on the back of weak global growth. The market will be seeking out further higher highs and the 0.7709 resistance level is likely to find itself under pressure soon.
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