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5 May 2015
NZD/USD targeting 0.7420 – Westpac
FXStreet (Barcelona) - According to Westpac, fundamentals, technicals and positioning signal towards a slightly negative outlook for NZD/USD for the week ahead, and hence target 0.7420 for the pair.
Key Quotes
“NZD/USD broke down last Thursday, the RBNZ’s shift in stance last Thursday the main catalyst, with bearish implications for the week ahead.”
“This week’s NZ employment report (Thu) should show a drop in unemployment from 5.7% to 5.5%. However, wage inflation will be scrutinised closely, since it is one of the conditions the RBNZ cited for easing.”
“There’s also a dairy auction (Tue) which presents downside risks given Fonterra’s recent production forecast upgrade.”
“The US data highlight will be the monthly payrolls report (Fri), advance indicators suggesting markets are vulnerable to being disappointed.”
“NZ macroeconomic factors this week mainly argue for a weaker NZD, while US factors argue for a weaker USD.”
“Positioning is a positive, speculators still rebalancing from a net short state. Technicals are arguably negative near term. Combining all the above, we tilt to a slightly negative outlook for the week. We target 0.7420 – the mid-April low.”
Key Quotes
“NZD/USD broke down last Thursday, the RBNZ’s shift in stance last Thursday the main catalyst, with bearish implications for the week ahead.”
“This week’s NZ employment report (Thu) should show a drop in unemployment from 5.7% to 5.5%. However, wage inflation will be scrutinised closely, since it is one of the conditions the RBNZ cited for easing.”
“There’s also a dairy auction (Tue) which presents downside risks given Fonterra’s recent production forecast upgrade.”
“The US data highlight will be the monthly payrolls report (Fri), advance indicators suggesting markets are vulnerable to being disappointed.”
“NZ macroeconomic factors this week mainly argue for a weaker NZD, while US factors argue for a weaker USD.”
“Positioning is a positive, speculators still rebalancing from a net short state. Technicals are arguably negative near term. Combining all the above, we tilt to a slightly negative outlook for the week. We target 0.7420 – the mid-April low.”