Another day of short-covering in this cross and we reached a level almost 200 pips above yesterday’s post RBA lows. The trend is still down but we could easily rally back towards 1.23/1.24 without endangering that trend. I’d play a wide range here in coming weeks, 1.20/1.24 say, as there could be some excellent opportunities to pick up an ‘easy’ 200 pips swing reversal.
NZ’s Wheeler said that there was scope to cut rates if the housing market cools and he also mentioned recent smoothing which they’ve done to stem the NZD rise; this is what sent the Kiwi tumbling.