Archived IMT (2011.03.10)

RBNZ Cut by 50 bps, Aussie Jobs Came in Negative & BoE Awaited for Nothing. Despite the RBNZs 50-bp cut to 2.50, NZDUSD quickly recovered from its slide to 0.7340s. The main reason NZDUSD had managed to stabilize was the pre-emptive nature of the rate cut. The RBNZ said: We expect that the current monetary policy accommodation will need to be removed once the rebuilding phase materialises. While this suggest the RBNZ is unlikely deliver further easing, it opens the way for further GDP weakness, something the cenbank alluded to prior to the earthquake. Weekly NZD stochastics appear oversold at this point, so traders can expect corrective moves to as high as 0.7440s before retesting 0.73.NZDCAD remains a favourite short after the Feb 2009 trendine support was broken at 0.7370s, now eyeing a prelim target of 0.6960s. NO BoE RATE HIKE EXPECTED on Thursday, but market is split between the tightening occurring in April and May. A surprise rate hike is highly likely drive cable towards $1.6300s but UNLIKELY to see the close above the oft-mentioned unclear $1.6350-70 trendline resistance, which every serious trader must be aware of in this important currency pair. ALSO WATCH OUT FOR UK MANUF OUTPUT at 9:30 am GMT, usually a market- mover (see calendar for expectations http://bit.ly/5pdFAN ) More on the tactical options on EUR vs GBP and ECB vs BoE in the HotChart http://bit.ly/gikAn3 US Weekly Jobless Claims have been increasingly attributed to major USD Thursday moves, so those are worth a look EUs vote on EFSF build-up and US retail sales are both on Friday. SEE PREV IMTs for those levels in EURUSD, AUDUSD and NZDCAD.