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NZDJPY<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Yen Takes It On The Chin

Continued weakness in the Japanese denomination helped in bolstering the already supported Kiwi major to take the cross higher.  Subsequently, it tops our three most market moving pairs and the second largest point move.  Contributing to the decline were sour retail sales reports and further speculation of Bank of Japan intentions.  More specifically, underlying concern over Septembers elections loomed over the market as sentiment is leaning towards a more dovish regime once the votes are casted and all is said and done.  Adding to the downside has been declines in the Nikkei 225 benchmark index as the current reading compares with the historic low.  For the record, the benchmark now stands 10 percent on the downside as funds move positions out of the market, exacerbating the need for Yen.  However, set aside from further dollar bullishness, the regions economic indexes were in line with previous consensus figures.  But the suggestions were tossed aside as both reports are seen as simple compendiums of already posted fundamental aspects.

Rumormill

Sellers look to emerge at the current 73.50 figure as we head into the Asian session as profit taking and overextended sentiment lead the way for the cross to dip.  Any bidders likely to emerge are surfacing just below the 72.50 figure and slightly below.  The placement corresponds with the medium term support at the 23.6 percent fib level from the recent bull wave.

AUDNZD

Cross Underpinned By Aussie <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Downside

A lack of gold bullion demand and higher US inflationary speculation added to overall Kiwi strength as the cross poses as the only decliner of the top three movers on the day.  Dropping 0.9 percent for the largest point drop of the session, the cross was suppressed by Aussie selling as speculators shorted on an inline US producer price gauge.  Placing further pressure on tomorrows report and subsequent congressional testimony, the report bolstered greenback bids in tandem with bullion shorters.  Contracts on the NYMEX dropped below the $630 figure as traders pared back positions on seemingly thinning violence in the Middle East this morning.  Consolidating at settlement, the price action decline helped sentiment to exacerbate the overall bearish Aussie notion triggering light stops below the 0.7500 handle, leading all the way down to the days low at 0.7446.  With noted cross and major buying adding to the dip, the cross may see reprieve from tonights leading index report.  The figure should bolster a short term reversal with noted consensus speculating for a higher posting.

Rumormill

Comparative to other Kiwi cross action, support is looking heavy with buyers emerging at the textbook support figure above the 1.1900 handle.  Further bids are expected on profit taking and position paring with likely barriers at 1.1950 and 1.2000 in the near term.

NZDUSD

Major Trades Higher On Inflation

The Kiwi major was bolstered by further momentum on yesterdays inflationary suggestions throughout the session as traders are siding with a potential for further rate hikes in the economy.  With inflation now running at a 4 percent pace, there is little that the central bank can do besides considering yet another round of monetary tightening closer to year end, increasing the probability.  However, it seems that positive US data has capped gains, momentarily, as producer price reports were inline with expectations.  The US report this morning now shifts focus to tomorrows consumer price index and Chairman Ben Bernankes congressional testimony.  Should comments remain hawkish, traders could expect further dollar strength in conjunction with a slight pickup in Middle Eastern violence that began this afternoon.  On the flip side, any weakness reflected through softer comments would spell further long dollar position liquidation, leading to upside and a retest of the 0.6300 handle.  As usual, with the schedule empty for the New Zealand economy, traders have little to pull on the Pacific side of things.

Rumormill

Buying continues to keep momentum into the Asian session, sparking a near term continuance to the upside at 0.6300.  Any gains made on the emerging bidding may be capped prematurely as sell orders are looking to take advantage of the downward sloping trend line of the past six months.  This move may purport short opportunities on a retest of the 0.6151 figure, 38.2 percent fib from the recent bull wave.  Should the pair break higher, 0.6400 looks to be the reasonable goal.