NZD/USD: Poised for a correction - Westpac

NZD/USD peaked at 0.7345 over a week ago and is poised for a correction worth a couple of cents at least, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“NZD/USD’s two-month old rally has mainly been driven by the falling US dollar. However that rally is technically stretched, and speculators are as long as they were in 2014, warning of a decent correction sometime in the next few weeks.”

“Data this week is minor for markets: We have REINZ housing data, electronic retail spending, food prices, ANZ consumer confidence, and manufacturing PMI.”

“Three months ahead: Our medium term outlook for NZD/USD is mainly dependant on the outlook for the US dollar. A rebound in the US dollar by year end could drag NZD/USD back to the 0.69 area. However, US fundamental developments (economic and political) are not promising.”