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NZDUSD<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Attributed to the Kiwi strength witnessed on the day was the retail sales report for the month of July.  For the third month running, retail sales figures jumped as employment in the Commodity Bloc economy increased and housing prices gained slightly.  For the record the actual figure jumped 0.5 percent higher as the core figure rose 1.3 percent on the month according to Statistics New Zealand.  With the jobless rate in the overall economy dipping to a record low of 3.6 percent in the second quarter, consumers have reason to be more optimistic of an economy where growth had previously been questioned.  Additionally, consumer reluctance has been waning in part due to rising house prices.  Previously falling, housing prices have since rebounded and have increased by 11 percent compared to a year earlier.  With residential property now adding to overall wealth in an individuals portfolio, buying power on the side of the consumer has increased.  The notion is likely to boost overall domestic growth as consumption contributes approximately 60 percent to an overall economys gross domestic product.  Subsequently, this boosts the near term optimism in the economy and will likely leave Governor Bollard with the decision not to cut interest rates any time soon.

Taking out the resistance at the 0.6435 figure, the currency pair has vaulted higher to the session top near 0.6470. Now paring back slightly, the Kiwi will likely be subject to a profit taking pullback to the 0.6441 figure (38.2 percent fib level from the days move) with likely capping taking place at the support floor of 0.6431, where bids are likely to emerge.  Given the fundamentals, central banks decision tonight looks predetermined which would boost the number of bids at the 0.6431.  However, a disappointment is likely to push the pair lower to the 0.6390 support where a supreme test is likely.

AUDUSD

More positive data for the Pacific regions fifth largest economy. Released in the overnight session, consumer confidence was boosted for the month and rebounded from the five year low seen in August.   According to the Westpac Banking Corp., consumer confidence surged 12.5 percent higher to a 101.2 print.  Reflective of the higher number of optimists in the economy, the increase is reflective of a dip in gasoline prices as consumers continue to remain wary of higher energy costs as opposed to rising interest rates as had previously been believed.  In addition, most of the index components rose along with future expectations and current assessment surveys.  The increased optimistic landscape will likely boost consumer consumption as reluctance becomes a thing of the past.  The report results coincide with already dominating sentiment that the central bank will be raising interest rates another 25 basis points by year end in order to curb any signs of further inflationary pressure.

Pulling back slightly, the Australian dollar looks ripe for profit taking ahead of the Asian session open.  The notion is likely to place the 0.7517 figure (38.2 percent fib level from the days move) in play with downside capping likely at the 0.7500 handle, where bids are residing.  The current top coincides with the 0.7535 15-minute close on 9/12 as sellers re-emerge ahead of the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />New York close.

NZDJPY

Although adding to Japanese yen strength in the major currency pair, comments from Bank of Japan board member Atsushi Mizuno werent able to help the yen battle against the still higher yielding New Zealand dollar in the North American session.  Speaking in an interview in the overnight session, Mizuno noted that central bankers continue to remain committed to rising interest rates despite recent reports indicting otherwise slower growth.  The notion alone has made recent believers into nonbelievers as survey after survey in recent months is beginning to show some dour results.  Both retail sales have confidence have dipped over the past quarter with gross domestic product posting a slightly lower than expected figure in the beginning of the week.  The figures alone are likely to keep central bankers at bay, making the Kiwi still the preferred carry of the two currencies.  Still holding positions, carry traders are looking to gain an additional 700 basis points in addition to spot appreciation.

Bouncing off of support at the 75.30 figure, the cross jumped higher to the session high topping 76.10 in New York.  Already pulling back, bids are likely to emerge at the 75.72 figure (50 percent fib from the sessions bull wave) in boosting position re-initiations in the overnight.  Confirming the notion looks to be a corresponding golden cross in the Stochastic oscillator with a more lagging signal from the MACD.