NZD/USD: Risk of upside spike before retracing lower in 2H’17 - Westpac

Sandeep Kanihama FXStreet Contributor

Tim Riddell, Research Analyst at Westpac, explains that daily momentum risks divergence as NZD spikes higher, a warning of a possible top if NZD fails to push through 0.7375 and near term pullbacks are critical.

Key Quotes

“If dips manage to hold above 0.7265, the uptrend can be sustained for a push towards 0.7485, but, as noted, risks or retracements are now high”

“Weekly

Weekly indicators are also high but remain supportive as 0.7325-75 is tested. A spike towards 0.7485 could still develop, despite bias for deep corrections
Even if NZD spikes to 0.7485, it would be seen as part of a broad consolidation. Consequently, a weekly close below 0.7265 could see range trading resume”

“Monthly

Monthly indicators may be neutral but as with AUD, upside surprises (if 0.7485 fails to cap rebounds) are possible on the basis of higher corrections/retracements
Monthly patterns still suggest that a broad consolidation is in place and that a return to broad range trading and tests of support are likely during 2H’17”

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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