NZD/USD Outlook: Down this week
Negative momentum in NZD/USD remains intact. We expect a break below 0.8310 (26 Aug low) towards 0.8250.
The main factor behind the NZD/USD’s six-week fall has been a strong US dollar – something we expect to persist during the week ahead. US economic data surprises have been extremely positive, witness the 14-year high in our data surprise index (Chart 2). While this implies a sharp reversal eventually, the near term should see markets continue to respond to current readings.
In addition, RBNZ intervention fears plus a stream of uninspiring economic data (migration aside) should keep downward pressure on the pair.
We continue to target 0.8200 or lower by year end.
Read the full report: FX Research