The kiwi struggled to take flight today after the recent drop in the unemployment rate which was a big move by any means as it dropped from 6.0% to 5.3%. From an economic perspective this is a massive jump and was completely unexpected, but it so far has been in part been led by statistics which do not tell the full story and in this case the participation rate is the key element here when it comes to deciding it all, as it dipped lower to 68.4% from 68.7% from 3 months earlier. This is a large drop in the scheme of things and shows that despite the sudden drop in the unemployment rate the economy is still finding itself under pressure. Many will now be looking across the Tasman Sea for guidance from Australia when it comes to commodity currencies.
On the charts the NZDUSD is actually looking quite bullish and despite today's data conundrum the market is ever poised to strike further if it can break through heavy resistance at 0.6556. For me this marks a line in the sand and I would expect to see the market look to exert pressure here in an effort to bust through the current market problems we have seen. Further highs are likely to touch on the upper resistance level at 0.6615 and this is likely a pivotal point for the market before it explores the option of higher highs. For myself personally a push back to the 0.70 level does seem very much on the cards as I feel the Chinese market has still not bottomed, despite all the easing we have seen.
Oil markets continue to find pressure when it comes to trading and the fact that the fundamentals are still reporting a strong surplus in the face of external pressure. Certainly these prices are at all time low and will be snapped up by consumers but in the mean time they continue to create headaches for OPEC members who rely heavily on oil flows to help prop up there economy.
Chart wise oil is looking all the more under pressure as it is currently held up at support at 29.49 and the market is positioning itself so it can swing lower on probably the one last swing we have seen from the market. The next level down from here can be found at 28.24 and is likely to act as strong support before the market looks to pierce through to the 24.00 barrel mark which I have talked about for some time. There is no market beyond this level and I feel that any dip lower than this will get whacked higher up in the long run.
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