AUD/NZD backs off from session highs after Aussie current account data

AUD/NZD trimmed gains to trade around 1.0675 despite narrowed than expected Q4, 2016 Australia current account deficit data. 

The deficit narrowed to AUD 3.9 billion from the previous figure of AUD 10.2 billion. Economists were expecting the deficit to come-in at AUD 4 billion. Net exports as a percentage of GDP printed at 0.2% as expected. 

Big miss on private sector credit

The bid tone around the Aussie may have weakened due to a sharp slowdown in the private sector credit growth. The number printed at 0.2% m/m in January compared to 0.5% expected and down from the previous month’s figure of 0.7%. 

The cross was last seen trading around 1.0675 levels. 

AUD/NZD Technical Levels

A break above 1.07 (zero figure) would open doors for 1.0738 (Feb 21 high), above which the cross could target 1.0748 (Feb 22 high). On the other hand, a breakdown of support at 1.0660 (session low) may yield a break below 1.0648 (23.6% of 1.0326-1.0748), in which case 1.0612 (Nov 25 high) could be put to test.