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NZD/USD absorbing offers at 0.79, follows AUD lead

FXStreet (Bali) - NZD/USD closed the NY session at day highs just below 0.79, and after a brief dip in the current Asian session, the rate has now picked up renewed momentum to retest offers at the round number line, with the Kiwi following the Aussie higher post NAB data, and amid general USD weakness.

On the fundamental front, Kiwi traders will be keeping an eye on Thursday morning’s GlobalDairyTrade auction. As Craig Ebert, Senior Economist in BNZ's Wellington dealing room, notes, "the resumed price plunge (-7.3%) at the previous auction has beaten us into a stronger state of agnosticism regarding near-term direction; if there is no material bounce at this week’s auction we will crystalize the downside risk we’ve been emphasizing, and move our dairy milk price forecast for this season down to $5.00 (perhaps even lower?), from the $5.30 mark we went with at the time of Fonterra’s announcement on 24 September."

Technically, Jim Langlands, Founder at FXCharts, notes: "I suspect we are in for a continuation of the choppy trade between the recent high/lows of 0.7974/0.7707, which would allow the daily charts to continue to unwind their oversold condition, and would therefore use this as a guide over the next few days."

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