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Sterling/Kiwi Chart Stands Out With Market By Record Lows
Written by article default Tuesday, 09 November 2010 12:22
With the exception of the Yen, the US Dollar is bid across the board and has managed to continue to extend gains into Tuesday trade. The Euro remains under pressure post FOMC, with renewed fears over rising debt in Ireland, Greece, Portugal and others, all fueling some decent profit taking in the major. This selling in the Euro has spilled over into the currency market with most of the major currencies reversing course and tracking lower along with the Euro. Also seen driving broader Dollar interest has been the better than expected US employment report and paring back of expectations for QE2 in light of what could be interpreted as an FOMC statement that warns that the Fed could very quickly rein in its ultra-accommodation at any moment should they see signs of additional recovery.If any of you are looking for an interesting chart that might offer some major upside over the coming year, then you should take a look at the GBP/NZD chart. This cross trades by record lows just shy of critical psychological barriers by 2.0000, and has been well offered for some time now. We are of the opinion that this market will soon look to establish a major bottom, and a long position at or near the 2 handle could very well prove to be exceptionally rewarding. We see scope for a push back towards 2.5000 over the coming months.
Looking ahead, German CPI (0.1%expected) is due at 7:00GMT, followed by UK industrial production (0.4% expected), manufacturing production (0.2% expected), and the trade balance (-GBP8B) at 9:30GMT. US equity futures are slightly lower while oil also trades with a heavier tone. Gold n the other hand remains well bid to yet another record high by $1415. We would warn gold bulls that despite the latest surge in price, the daily RSI is not confirming the price action, which could be a bearish development.