The Australian dollar eased on Friday, following its New Zealand’s peer as Fonterra surprised markets by unexpected downward revision of its supply forecast.
As the New Zealand dollar (so-called kiwi) is sensitive to such moves on the dairy market, due to its large portion on country’s exports, kiwi dropped, while speculations on the Reserve Bank of New Zealand’s cut of the benchmark interest rate (Official Cash Rate, now at 3.50%) dragged the currency further.
Aussie dropped as well with the kiwi’s fall, while the US dollar strengthening added to correction from an aussie’s 4-month high.
Traders are now watching the US dollar rate-hike bets, already moved to September and possibly postponed even to December if negative data-driven sentiment persists. Long-term bullish perspective for the dollar is being seriously hurt by short-term downward correction after Q1 disappointment and non-stellar recovery in April, if any.
From the technical point of view, we can see next stronger support at $0.7983, or later at $0.7887. As for the resistance levels, we can see next level at $0.8132, or if data-driven disappointment persists, next resistance level stays at $0.8215.
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