NZD: Close above 0.7255 could trigger a retest of recent highs - Westpac
|Research Team at Westpac, suggests that the macro-economic backdrop for the NZD remains positive while the activity remains at a high level across almost all sectors and confidence among businesses and consumers is high.
Key Quotes
“Even the formerly downtrodden dairy sector is seeing green shoots, though the pace of price gains remains more muted in recent auctions. Against the USD though NZD suffers from a declining interest rate advantage, likely to narrow even further after 10 November when the RBNZ cuts the OCR because inflation is too low (Q3 CPI is running at 0.2% yoy, well below the 2% midpoint target).
Technical: Rebounds off 0.7050 have flipped daily momentum to NZD positive. Broader patterns are in conflict and the former H&S neckline (0.7245-50) is both an attraction and pivot. If it caps NZD, beware a quick slide through 0.7140 to retest 0.7035-50. Conversely, a close above 0.7255 could trigger a retest of recent highs before corrective declines develop. Therefore, near term neutral.”
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