According to analysts from Westpac, NZD/USD points to the downside in the long-term while in the short-term they signal that a break above 0.6900 would be very bullish for the kiwi.
“NZD/USD last week tried to break above 0.6875-0.6900, an area which was previously unbreachable in Oct and Dec. We suspect a brief pause from here, which could see it slip to 0.6700, before another attempt higher is attempted. Any break above 0.6900 would be very bullish and argue for a multi-cent rally from there.”
“We expect NZD/USD to fall towards 0.64 by mid-2016, due to a combination of a lower OCR and a higher US interest rates. In addition, NZ commodity prices are expected to remain soft. We see the main risk to this view as being a failure of the US dollar to strengthen.”
“Our macro-economic based forecast for one-year ahead is 0.62, based mainly on the OCR being cut by another 25bp to 2.0% and the Fed rate to rise further from 0.375% this year.”
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