NZD/USD Outlook: Down this week
NZD/USD momentum has reversed, pointing to a test of the 2013 low of 0.7684 this week.
Fed tapering fears have receded with the slightly dovish FOMC statement and weaker July payrolls, but NZD/USD has not benefitted. That may be partly due to the Fonterra dairy product recall, but NZD/USD started weakening last week even before the news broke, suggesting other factors at play.
For that reason, combined with the RBNZ’s tightening bias, we adopt only a cautious bearish stance towards NZD/USD, and require a break below 0.7685 to confirm to us that the NZD is indeed resuming its multi-month slide towards 0.7200.
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