Kiwi under pressure after ANZ Monthly Inflation Gauge showed that inflation rose just 0.6% in January, slightly lower than is typical for this time of the year.
- Risk-aversion back in the markets as evidenced by extension of yesterday's losses in the Japanese stocks. Japan's Nikkei is down -2.30%, while Australia's ASX drops -2.19%. A further drag on the bird.
- Weakness in the Greenback on falling Fed rate hike bets this year is not benefiting the pair, as the antipodeans seem to be driven by risk sentiment across markets.
- Fed Chair Yellen's testimony and US crude supply data due later in the US session today could have a major influence on the pair.
- Next immediate resistance is located at 0.6642 (5-DMA) ahead of 0.6656 (cloud base) above which it could extend gains to 0.6663/68 (Feb 8 & Jan 7 High).
- On the downside, immediate support might be located at 0.6589 (10-DMA) and the at 0.6563 (Feb 9th lows). Breaks below could see test of 0.6540 (trendline support).
- Technicals are inconclusive, for now we would wait on the sidelines and watch out for Yellen's testimony and US crude supply data for clues.
