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.”
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