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Kiwi plummets back to previous lows near 0.8050

FXstreet.com (Barcelona) - The Kiwi finished the session sharply lower, down 109 pips to close at 0.0857as a ‘risk off’ vibe echoed throughout the markets after Fed Chairman Bernanke’s testimony in front of congress.

According to Mike Jones, Currency Strategist at BNZ, ‘Smoothing through a bit of volatility (which saw the NZD/USD briefly propelled to 0.8200), the market response has generally been to take US bond yields and the USD higher. US equity markets, meanwhile, have spat the dummy, declining 0.7-1.4%. “For today, we expect the NZD/USD to remain heavy as the market digests last night’s more hawkish Fed rhetoric. Exporter hedging demand may provide a boot to the currency, but bounces should be limited to around 0.8120. A convincing break below key support at 0.8060 would pave the way for a deeper correction towards 0.7920. “

The FXStreet.com Trend Index remains Slightly Bearish on the 1 hour chart, while the OB/OS index reads neutral. Initial support sits at 0.8050 (swing low from Nov 16th), with a break below here most likely opening the doors to the 0.7975 area (previous resistance, now support from weekly chart on 11/5/10). First resistance sits at 0.8108(the 20dma on 1 hour chart), followed by 0.8153 (the 9dma)

EUR/JPY goes wild just to end about flat for the week

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