NZD/AUD: Further consolidation around 0.9200 is possible - Westpac

In view of Imre Speizer, Research Analyst at Westpac, the technically important break below the 0.9300 area for NZD/AUD pair has been sustained (surviving a decent rebound) and some further consolidation around 0.9200 is possible before the multi-month downtrend resumes.

Key Quotes

“This week’s Australian data calendar contains Feb retail sales and building approvals plus March inflation gauge (all Mon), and then Feb trade balance Tue- 3 hours ahead of the RBA statement. Potentially supportive for the AUD this week should be a bounce in trade surplus and a mostly positive tone from the RBA.”

“3 months 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.”