Kiwi is beginning the week on a weaker tone after failing to capitalize on a bullish break from flag pattern on friday, which translated into a bearish closing at 0.6785.
Fonterra is expected to report strong results when it releases its half-year results on Wednesday, but China’s debt concerns may keep the currency under pressure.
Nevertheless, a break above 0.68 handle could turn the attention to 0.6819, which if violated would expose flag resistance at 0.6857.
Conversely, a failure to take out 0.68-0.6819 if followed by a move below immediate support at 0.6747 would increase risk of a bearish break from flag formation. still, bears would need to watch out for a rebound of flag support seen around 0.67 handle.