FxWirePro: Kiwi might attempt breakout over dairy auction

This year, the price of the dairy, which is the major export commodity of New Zealand, has been recovering. In the last two auctions, the price has moved higher by 6.6 percent and 12.7 percent. While this has been supportive of the kiwi, the dairy farmers couldn’t lock in all of the gains due to rise in the value of the exchange rate.

The New Zealand dollar is currently trading at 0.734 area and if the dairy auctions turned out to be a good one, the kiwi is likely to clear off the resistance zone around 0.73 area decisively.

Trade idea: We expect the New Zealand dollar to trade strong against the USD. Making a base around 0.7 area, we expect the kiwi to move towards 0.8 area against the dollar. The rally may get extended towards 0.82.