The Kiwi (NZDUSD) enjoyed a 40 point rally last night as business confidence data showed a 12 point increase to it’s highest level since May of this year, reaching a high of 0.6686. Although it has subsequently tailed off, surrendering most of its gains, we see this as a perfectly normal – and healthy – response to the knee-jerk reaction of the headline figure. The figures for future investment expectations remained disappointing and the NZD remains in a ranging downtrend channel. The best way to trade such a channel is to trade into momentum by buying dips and selling rallies, and most importantly, not to get drawn into trading in the no-mans land in the middle. There should be good selling interest anywhere up to 0.6725 with buyers in the 0.6610/30 area. Only a daily close above 0.6725 would cause us to re-evaluate our view.