NZD/USD: Break Below Four-Month Old Ascending Channel - Westpac

NZD/USD: Break Below Four-Month Old Ascending Channel - Westpac

Imre Speizer, Research Analyst at Westpac, notes that the NZD/USD has broken below a four-month old ascending channel such that momentum is now pointing downwards, mainly due to the US dollar’s rebound since 3 May.

Key Quotes

“Looking at the week ahead, the RBNZ inflation expectations survey will be important given a June RBNZ cut has scope to be priced further than the current 65%. Against that, the RBNZ has disappointed expectations of imminent macro-prudential tightening, causing some NZD short positions to exit. A 0.67-0.69 range is expected, but looking three months out, we target 0.65 based on the RBNZ’s easing combined with Fed’s tightening biases.”