NZD/USD Outlook: Positive Near Term
NZD/USD should strengthen to 0.8585 this week. Assuming the NZ employment report doesn’t disappoint, the NZD should remain supported by near term global sentiment which has been boosted by the US employment report. That said, the negative risks we have alluded to during the past few weeks have not faded either. These include a mid-year US seasonal slowdown, possibly peaking NZ economic momentum, and record speculative long-NZD positions in the futures market. So far these risks have failed to significantly dent the NZD, but if they do materialise, they could push NZD/USD to around 0.8300 – the bottom of a rising channel.
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Westpac