NZD/USD

Building Consents Out at +4.7%

Previous -20.1%

Building Consents are the change in the number of new building approvals that are issued.  It is a good gauge of construction activity in the future because the first thing required for construction is a permit.  It also creates jobs, and expands into business for other goods and services such as supplies, and sub-contracting.

The New Zealand and US Dollar chart featured below displays a sharp decline in the valuation of Kiwi versus the US Dollar, beginning before the July 23rd rate decision and continuing with a sharp decline after the rate reduction (8.25% > 8%). The Fibonaci retracement below was created using the 7/15 highs following the news of the potential default of Freddie Mac and Fannie Mae, to the lows made after the rate reduction. The Kiwi is currently holding support at the 0.0% retracement level.

Kiwi trying to recover some ground on a longer term chart. At this point, it appears that the pair may try to take out the .7800 figure level which is the 50% retracement level of the initial upwave shown.

Kiwi has several nicely proportioned corrective waves which may make for a nice play using the top range as either a breakout or range bound entry, depending upon your trading strategy...

• NZD/USD has been trading in a tight range - forming a triangle formation
• The moving averages are consolidating - indicating a build up for an implusive move up or down
• Look for the move to extend after a break up or down through the triangle formation
• Tonight the trigger could be the NZD GDP announcement (expectations are year-on year + 3.4% and 0.8% MoM).  Release is at 5:45 PM.