NZD/USD: Sell at 0.6850 - Westpac
|Imre Speizer, head of NZ strategy at Westpac is recommending to go short on NZD/USD pair at 0.6850 levels.
Key Quotes
“Rationale: The RBNZ’s dovish shift earlier this week was a major surprise for markets and forecasters. Fundamental developments didn’t necessarily warrant such an abrupt shift, but concerns the NZD could rise further appeared to be a major decision factor. The RBNZ has signaled its aversion to currency strength, and we expect that to remain a key element of its dovish stance going forward.
The US dollar has priced in not only a lengthy Fed pause but also a rate cut within a year. A positive US economic data pulse may be clearer once we see Q2 numbers, and that may pare Fed pricing, supporting the US dollar.
NZD/USD fell sharply from 0.6925 in response to the RBNZ surprise, and we are loathe to chasing, it but prefer selling into a (50%) corrective bounce.”
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