NZD/USD in a neutral state – Westpac

Sandeep Kanihama FXStreet Contributor

According to NZD/USD ran out energy at 0.6465 and is now in a neutral state, needing to sustain a break above 0.6440 for the near-term bullish case to be revived.

Key Quotes

“Below 0.6335 argues for a decline to 0.6200 during the month ahead.”

“Yesterday’s unemployment data was slightly weaker than expected, causing the NZD to underperform slightly. However, the 4.2% unemployment rate is lower than the RBNZ’s 4.4% forecast. Moreover, wage growth has picked up – still below pre-GFC levels (chart across) but above the RBNZ’s forecast.”

“Next week’s RBNZ MPS is priced by markets as a 70% chance of a 25bp cut, which means a NZD reaction is likely whatever the decision.”

“Multi-month, we remain bearish, targeting 0.6200 by January. We expect the NZD/USD to be weighed down by a stronger USD which should continue to benefit from trade wars and global risks.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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