NZD/AUD cross at a crossroads - Westpac

According to Imre Speizer, Research Analyst at Westpac, after breaking below key support at 0.9280, the cross has returned to that area and is now at a crossroads and any higher than 0.9350 would cast doubt on our medium-term bearish outlook.

Key Quotes

“Australian industrial commodity prices have lost some altitude in recent days but Australia’s export performance should remain a key positive for AUD, even though we have to wait until 4 April for the next official data.”

“This week’s Australian data calendar The data calendar remains very quiet ahead of a very busy start to April.”

“3 months ahead: NZD/AUD is starting to reflect the outperformance of AU commodities as well as better AU economic data ahead. We target the 0.8800 area multi-month, which coincidentally is close to fair value according to our model which captures interest rates, commodities, and risk sentiment. The cross is now only 4% overvalued, compared to 9% late last year.”