NZD/USD resistance selling at 73.4c capping rise; Market in wait and see mode ahead of Jackson Hole gathering; GBP remains susceptible to short term bounces

By Kymberly Martin

The NZD/USD and the GBP/USD have again been the best performers over the past 24-hours, though gains have been relatively modest. The USD index has pushed a little higher.

The market remains very much in wait-and-see mode ahead of this weekend’s Jackson Hole gathering, where Fed Chair Yellen is scheduled to speak.

There were only low key data releases overnight. A modest rise in the USD continued.

Whilst the EUR/USD drifted lower overnight the GBP/USD managed to extend its rebound for a third day. It now trades at 1.3240.

This remains well within the broad 1.28-1.35 range the currency has traded since its post-‘Brexit’ plunge. It remains more than 10% below its pre-‘Brexit’ level.

As highlighted yesterday, positioning is the key risk that could see the GBP extend its near-term gain. Given speculative short positions in the GBP are at record highs, it remains susceptible to short-term bounces on new information that does not support an entrenched negative view.

The NZD/USD pushed higher last evening after trading sideways for much of yesterday. However, it again found resistance at range highs approaching 0.7340. It now trades near 0.7310.

The NZD/AUD has extended its fairly steady gain that has been in place since the second week of this month. It now trades at 0.9600. The early-July highs close to 0.9700 are now within sight.

There is a dearth of scheduled data releases on either side of the Tasman today.

Whilst there is a smattering of offshore data releases scheduled for this evening, the market will likely remain caught in limbo ahead of the weekend’s address by Fed Chair Yellen.

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