0
806
Barclays told to investors to sell NZD/CAD this week provided fundamental and technical analysis for this pair.
Fundamental overview:
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"Given the risks around this week’s September Fed meeting, we
prefer to look for relative value away from the USD. We think short
NZDCAD represents an attractive opportunity within the commodity complex.
The New Zealand economy is significantly more exposed to downside
Chinese growth risks with exports to China representing 5% of GDP,
versus less than 2% of GDP for Canada. Long-term valuations also support
this trade with our BEER model suggesting the CAD is 11% undervalued,
while NZD is 7% overvalued."
Technical Overview:
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"Our technical strategist remains bearish NZD and expects further
underperformance versus the CAD. Recent support erosion endorsed the
bearish June range break as well as our overall bearish view. We are looking for further downside towards initial targets in the 0.7900 and then lower towards the 0.7635, 2012 lows."
As we see from the chart below - NZD/CAD daily price is located below 100-day SMA and below 200-day SMA for the primary bearish market condition. Besides, 100-day SMA crossed 200-day SMA from above to below for the bearish trend to be continuing with 0.8293 as the nearest bearish target. If the price breaks this 0.8293 support level so the next bearish breakdown target is 0.8007 support level.
Thus, the bearish trend will be continuing for NZD/CAD for this week related to fundamental/technical point of view.
