Aussie, NZD dollars on the defensive, mood fragile

WELLINGTON/SYDNEY: The Australian and New Zealand dollars were on the defensive on Friday, as the European debt crisis appears no closer to a resolution, keeping a lid on potential moves higher.

Aussie softer at $1.0130, from $1.0150 in New York, but up from a one-month low of $1.0051. For the week, it is down 2.6 pct.

Daily charts are negative with the slow stochastic and the MACD heading lower with the moving averages. Resistance is found at the top of Ichimoku cloud at $1.0231 and resistance at the 20-day Bollinger band at $1.0035.

The NZ dollar under pressure at $0.7762, having bounced back from overnight one-month lows of $0.7677. It is down 2.6 pct for the week.

Kiwi support initially at $0.7732 and then $0.7670, with $0.7822 set to cap the top side.

Earlier this week, NZ central bank warned of rising risks to the economy, with banks funding costs set to rise because of the euro zone crisis. NZ relies heavily on foreign funding to fill a local savings gap.

Finance Minister Bill English also told Reuters on Thursday that the currency was too high, creating a headwind to the rebalancing of the economy.

On Friday, data shows soft NZ house sales and prices while ANZ job ads down 2.5 pct in October.

Fragile mood pushes the kiwi lower on the yen. Last hovering around 3-week lows at 60.51 yen, down more than 3 pct this week.

Aussie steady against kiwi at NZ$1.3054, off an overnight trough of NZ$1.2958.

NZ government bond prices softer with Treasuries and yields as much as 4 bps higher.

Australian debt futures retreat from one-month highs. The three-year debt contract is down 0.06 points at 96.580, and the 10-year also 0.045 points lower at 95.845.