daily forex news january 29th 2013

Daily Forex News January 29th 2013

FCTOFX | Commodity currencies recovered today partly thanks to the strength in gold and crude oil. The Newzealand Dollar jumped strongly after trade balance unexpectedly showed a 486 million surplus in December compared to expectation of a 105 million deficit. That was indeed the largest surplus figure since 1991. Imports dropped 19% from a month earlier to 3.58 New Zealand Dollars compared to a solid 6.2% rise in exports to 4.07 billion dollars. And the large fall in imports was seen as mainly due to a crop in crude oil imports and thus, was not taken as a sign of domestic demand weakness. The Reserve Bank of News Zealand is going to meet this week and is widely expected to keep rates unchanged at 2.5%. Indeed markets are generally expecting the reserva bank to be on hold for the rest of the year.

View FCTOFX Live Trading @ http://bit.ly/W9RJWK


Technically, New Zealand Dollar / US Dollar has been stuck in range of 0.8155 to 0.8475 since early December. A larger rally from 0.7457 might extend further but it's been clearly losing momentum. Also, such a rise is seen as the third leg of a consolidation pattern from 0.7370 and the 0.8469 resistance was already breached. We'd believe that upside potential for New Zealand Dollar / US Dollar is limited as strong resistance: even in the case of another rise, could be seen from the upper channel (now at 0.8598). A Reversal risk is also high at this point and a break of the 0.8155 support will turn outlook bearish for the 0.7370 to 0.7457 support zone.



The Australian Dollar was also give a small lift by National Australia Bank business confidence data which rose from -9 to 3 in December. However, the National Australia Bank is skeptical on whether the "feeling of relative optimism will be sustained into the New Year". And it's actually still well below its long term average of +5. The National Australia Bank tipped that the Reserve Bank of Australia could lower interest rates by another 75 base points this year and the economic growth falls well below trend. It's expecting rate cuts in February or March, May and August. The Conference board leading indicator dropped 0.2% in November. Technically Australian Dollar / US Dollar is trading below the 1.0467 minor resistance in spite of today's recovery. And we'd stay cautiously bearish and expect a further dip to 1.0344 support within this week. Euro / Aussie is also expected to challenge the 1.3 psychological level soon.



Other data released so far saw German GFK consumer sentiment improve slightly more than expected to 5.8 in February. Looking ahead, S&P Case-Shiller 20 cities price index is expected to show a 5.6% year on year rise in November. But the main focus is on consumer confidence which is expected to drop slightly to 64 in January.


daily forex news january 29th 2013

News & Politics