NZD vulnerable to a retest of 0.7035 - Westpac

Sandeep Kanihama FXStreet Contributor

Research Team at Westpac, suggests that while the macro-economic backdrop for the NZD remains positive, we received confirmation last week that inflation remains low.

Key Quotes

“Q3 CPI ran at just 0.2% yoy, which is well below the RBNZ’s 2.0% target midpoint, and thus highlights the need to cut the OCR again on 10 November to a record low 1.75%. Markets will be reluctant to buy the NZD with conviction within two weeks of a rate cut.

Technical: As with AUD, technical bias has flipped recently with broader patterns still in conflict. The failure to close above the H&S neckline (0.7250) leaves NZD vulnerable to a retest of 0.7035. Short-term resistance lies at 0.7190. In the interim, bias is to sell into rebounds with tight stops.”

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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