Top market movers: NZDUSD; NZDJPY; AUDNZD

The Kiwi rallied on the session as US economic data was mostly in line with estimates. Expecting higher inflationary figures, the market was mildly disappointed as it becomes increasingly clear that a halt in monetary tightening is imminent. The consumer price index survey rose in line with expectations, rising 0.2 percent on the month. In addition, US industrial production figures were relatively lackluster. Now with both producer and consumer price levels relatively stable, and not indicating any momentous moves on the upside, the sentiment is overriding that Federal Reserve policy makers will continue to wait on their hands for further developments before taking interest in the hiking notion. Most notably, central bankers would like to see further example of inflationary pressures on the consumer side with upticks in manufacturing and overall production figures. Dollar bearish, today's results will likely overshadow the week ending reports including the leading indicators and Philadelphia Fed. Subsequently, the momentum triggered stops along the 0.6435 level with some spill over from aggressive AUDNZD shorting on the day. This push brought the pair higher by 1.2 percent from the day's low of 0.6337 to the session high at 0.6443 before stalling on consolidation.

NZDJPY

Traders bid up the Kiwi against the yen as rumors continued to spread of further rate hike considerations by the Reserve Bank of New Zealand. Already tops on the rank of highest rate of returns amongst industrialized nations, the decision would offer a 750 basis point rate advantage against the yen, now offering a lowly 25 basis points, in the currency cross. Based on inflationary reports earlier in the week, price increases are remaining strong and continues to underpin a move higher above the 5 percent that is currently hovering over the economy. Coupled with a rebound in the housing sector, the reports are suggestively furthering speculation on the inability of the central bank to curb the region's spiking inflation. This notion will leave Governor Alan Bollard no choice but reconsider further tightening should growth justify the price increases. Yen bullish speculation continues to remain under the radar even as the market has deemed the region free of deflationary pressures. Lending to the bullishness was this morning's release of the meeting minutes for the Bank of Japan. Voting a majority to raise rates by the 25 basis points, underlying suggestions were made to consider a 50 basis point decision this time around, however to no avail. Nonetheless, the minutes did reveal a definitive attitude that the central bank will gradually raise interest rates over time. The cross seems relatively overbought in the current scenario as barriers are likely to emerge on today's momentum. Offers emerging around the 7500 figure would coincide with a confluence of topside resistance trendline in the daily and the April 20th spike high, providing for some capping in the near term. A break above would see bulls make a considerable run to the next area of resistance just above 0.7600. The 240-minute perspective confirms the aforementioned on a probable profit taking double top.

AUDNZD

Aussie confidence dipped to a 5-year low, as recent rate hike decisions have led consumers to rethink their spending plans. Already indebted, households remain concerned over the higher cost of that their money or disposable income, imminently contributing to overall spending in the region. According to the Westpac-Melbourne Consumer Sentiment report, the index tumbled 16.2 percent to a 90 gauge. The dip ranks as the second biggest decline and takes the report to the lowest print since March of 2001. As a result, market participants weighing heavily on a consecutive rate hike by the Reserve Bank of Australia were concerned of an immediate halt as the most recent rate hike is likely filtering through the economy. For the record, rate decisions tend to have a lag of one to two quarters before disseminating through the region. As a result, traders took the Kiwi dollar's side bringing the cross lower throughout the session and further below the 1.2050 figure. Following the overall declining trend, the cross continued to breakdown as the final support floor at 1.2000 failed to underpin the loss. However, the current consolidation leading into the Asian session may be reflective of a bottom as the price encounters support at the 1.1900 figure. The floor is seemingly confirmed through consecutive session closes in April and the July 18th spike low on the daily perspective. Subsequently, oscillators are confirming the move higher showing completely oversold suggestions.

Kathy Lien is the Chief Currency Strategist at Forex Capital Markets. Kathy is responsible for providing research and analysis for DailyFX, including technical and fundamental research reports, market commentaries and trading strategies. A seasoned FX analyst and trader, prior to joining FXCM, Kathy was an Associate at JPMorgan Chase where she worked in Cross Markets and Foreign Exchange Trading.