By DailyFX - NZDUSD.Kiwi Trades, Traders Listen The Kiwi currency moved higher on the session, furthered by continuing momentum from Friday's carry trade speculation.Additionally...

... bolstering the underlying was a relatively large euro kiwi issuance of
$NZ200 million via TD Securities. These types of issuances can underpin
strength as more of the currency is converted to meet purchase
requirements. However, now rising to test the 0.7120 figure, plenty of
downside remains for the single major as traders square positions ahead
of tomorrow's Federal Reserve announcement. Expected to raise the
short term rate once again by 25 basis points, market sentiment has
shifted to consider the notion of a looser tightening policy as we head
into 2006. As a result, individuals will be scrutinizing the subsequent
rhetoric.

Technically Speaking
The New Zealand dollar has already broken its first level of resistance
that stands in the NZDUSD's way to rallying to 0.7200. The 23.6 fib of
the November, kiwi rally at 0.7094, which was also the former resistance
level from October, has already been broken. Little stands in the way
of a continued rally for the pair to the six month high 0.7200 touched
on the fifth of this month. This level will be hard to surpass as its
has been a strong support and resistance level through the year. If the
23.6 fib is taken out in another dollar rally, the rising trendline from
the beginning of November would likely align with the 38.2 fib, of the
same run, at 0.7028 will give another chance for kiwi bulls to gather
strength.

USDJPY

Positive Yen Data Bolsters Dip
A cornucopia of positive data for Yen bulls on the session as the
majority shifted sentiment ahead of the Federal Reserve announcement
tomorrow. First on the docket, the current account surplus grew to
slightly above estimates. Although narrower than the previous month's
figure, the figures continue to retain a positive bias as opposed to the
growing U.S. deficit. In additon, consumer confidence rose on the month
at a 48.2 reading versus the previous 47.9. Approaching ever closer to
expansion suggestions, the turn in sentiment is reflective in the better
than expected household spending figures seen previously. Finally, but
most importantly, domestic wholesales prices rose on the annualized
comparison. Although unchanged on the monthly figure, the annualized
print remains suggestive that prices are rising on the wholesale level.
Subsequently, last month's figure was revised higher to 2 percent.

Technically Speaking
Yen command of the USDJPY pair is coming to another level of support,
on which dollar bulls can once again jump in. After breaking the former
short-term support level at 119.95, a run on the rising trendline
established on November 1st, currently at 119.60.50 was rendered
unsuccessful. If yen interest can take this level, there is a cluster
of levels below it to be concerned about. A 38.2 fib of the month long
dollar rally at 118.80/5 is a net just north of the strong, three-year
50.0 fib level at 118.45. Keeping a potential dollar rally contained
will be loose yen bidding at 119.95, while the most pressure would be
put on the pair when the newly formed two-and-a-half year high stands at
121.40.

USDCHF

Dollar's Down Day
Expected to raise rates another 25 basis points to 4.25 percent,
Federal Reserve policy officials continue their attempts in curbing
inflationary pressures. However, in light of recent economic data,
further rate hikes may not be as immediately needed as previously
established. Mainly, increases in inflationary pressures have been
minimal compared to gains in output and productivity. Manufacturing
remains steadfast as does consumer demand and consumption. However,
with core consumer prices remaining tepidly hovering 2 percent, albeit
disregarding the temporal surge in September, inflation seems well
contained. Sparking speculation of looser monetary policy going into
the new year were statements following the last meeting by central
bankers. Afterwards, policy officials emphasized concern over the rate
at which the benchmark was rising and further stated a need for
continued confirmation of higher rates through hard figures.

Technically Speaking
What started out as a slow turn in the Swiss Franc's favor has evolved
into a strong rally. However, that rally is hitting a few significant
levels. A confluence between a three month rising trendline and a 73.6
fib of the dollar rally from the beginning of November made 1.2850/5 the
imbreachable level into day's price action. If the swissie stays in
control through this level, a move to the 50.0 fib of the 3 month dollar
rally from September at 1.2765 will be the next level for the bidding
war. Resistance isn't in short supply either. Initially, the 61.8 fib
will hold back a rally at 1.2921, but the nearest significant level is
at 1.2991 - the 50.0 fib and former range low for most of the month of
November.

By DailyFX