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Friday’s trade saw NZD/USD within the range of 0.6653-0.6723. The pair closed at 0.6692, up 0.36% on a daily basis, while marking a ninth consecutive trading day of gains. The daily high has been the highest level since July 29th, when the cross registered a high of 0.6742. In weekly terms, NZD/USD surged 3.83% last week, while extending gains from the week ended on September 27th. The weekly advance has been the most considerable one since the week ended on December 4th 2011, when the pair appreciated 5.09%.

At 9:33 GMT today NZD/USD was gaining 0.37% for the day to trade at 0.6719. The pair overshot the upper range breakout level (R4), as it touched a daily high at 0.6738 at 7:40 GMT. It has been the new highest level since July 29th.

No relevant macroeconomic reports, which would influence NZD/USD trading, are scheduled for release today.

Correlation with other Majors

Taking into account the week ended on October 11th and the daily closing levels of the major currency pairs, we come to the following conclusions in regard to the strength of relationship:

NZD/USD to AUD/USD (0.9752, or very strong)
NZD/USD to GBP/USD (0.9044, or very strong)
NZD/USD to EUR/USD (0.8211, or very strong)
NZD/USD to USD/JPY (-0.6144, or strong)
NZD/USD to USD/CHF (-0.7485, or strong)
NZD/USD to USD/CAD (-0.8294, or very strong)

1. During the examined period NZD/USD moved almost equally in one and the same direction with AUD/USD, GBP/USD and EUR/USD, while moving almost equally in the opposite direction compared to USD/CAD.

2. NZD/USD moved strongly in the opposite direction compared to USD/JPY and USD/CHF during the past week.

Bond Yield Spread

The yield on New Zealand’s 2-year government bonds went as high as 2.615% on October 9th, or the highest level since August 20th (2.640%), after which it slid to 2.595% at the close to gain 3 basis points (0.03 percentage point) on a daily basis. It has been a fourth consecutive trading day of increase.

The yield on US 2-year government bonds climbed as high as 0.657% on October 9th, or matching the high from the previous day, after which it fell to 0.641% at the close to add 0.004 percentage point compared to October 8th, while marking a third consecutive trading day of increase.

The spread between 2-year New Zealand and 2-year US bond yields, which reflects the flow of funds in a short term, expanded to 1.954% on October 9th from 1.928% on October 8th. The October 9th yield spread has been the highest one since August 19th, when the difference was 1.969%.

Meanwhile, the yield on New Zealand’s 10-year government bonds soared as high as 3.485% on October 9th, or matching the high from the prior day, after which it slid to 3.460% at the close to appreciate 3 basis points (0.03 percentage point) compared to October 8th, while marking a fourth straight trading day of gains.

The yield on US 10-year government bonds climbed as high as 2.138% on October 9th, or the highest level since September 28th (2.169%), after which it slipped to 2.090% at the close to lose 1.2 basis point (0.012 percentage point) compared to October 8th. It has been the first drop in the past three trading days.

The spread between 10-year New Zealand and 10-year US bond yields widened to 1.370% on October 9th from 1.328% on October 8th. The October 9th yield difference has been the most notable one since June 24th, when the spread was 1.382%.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the daily pivot levels for NZD/USD are presented as follows:

R1 – 0.6698
R2 – 0.6705
R3 (range resistance) – 0.6711
R4 (range breakout) – 0.6731

S1 – 0.6686
S2 – 0.6679
S3 (range support) – 0.6673
S4 (range breakout) – 0.6654

By using the traditional method of calculation, the weekly pivot levels for NZD/USD are presented as follows:

Central Pivot Point – 0.6615
R1 – 0.6800
R2 – 0.6908
R3 – 0.7093

S1 – 0.6507
S2 – 0.6322
S3 – 0.6214

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