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28 Mar 2014
NZD/USD high for now, but what’s the risk?
FXStreet (Guatemala) - NZD/USD is having a pop at the 0.87 handle, falling shy at 0.8695 while the US dollar has been put aside across a number of pairs.
NZD/USD has been a star performer and has been enjoying a stay on higher ground over the last 24hrs after a embarking on a hike uphill from the start of the week.
NZD strength justified currently
Strategists at TD Securities explained that New Zealand's terms of trade continues to skyrocket, up 20% in the year to December to record highs. “This is one reason why NZD strength is justified on fundamental grounds, notwithstanding the headline grabbing 5% slide in the latest Fonterra dairy price auction”.
NZD risks to the downside
The strategists noted mind you that they are increasingly of the view that outsized NZD strength is due to expecting +250bp of rate hikes over the next two years, with zero downside risks to the global and local economy. “As the NZD is priced for ‘perfection’, we expect a correction in the near term on any data or event disappointment”.
NZD/USD Levels
The 20 DMA is 0.8497, the 50 DMA is 0.8363 and the 200 DMA is 0.8183. RSI (14) reads 61.32. Supports are ascending from 0.8516, 0.8533, 0.8565, 0.8590, 0.8620 and 0.8640. Spot is 0.8685 while resistances are 0.8695, 0.8733 and 0.8785.
NZD/USD has been a star performer and has been enjoying a stay on higher ground over the last 24hrs after a embarking on a hike uphill from the start of the week.
NZD strength justified currently
Strategists at TD Securities explained that New Zealand's terms of trade continues to skyrocket, up 20% in the year to December to record highs. “This is one reason why NZD strength is justified on fundamental grounds, notwithstanding the headline grabbing 5% slide in the latest Fonterra dairy price auction”.
NZD risks to the downside
The strategists noted mind you that they are increasingly of the view that outsized NZD strength is due to expecting +250bp of rate hikes over the next two years, with zero downside risks to the global and local economy. “As the NZD is priced for ‘perfection’, we expect a correction in the near term on any data or event disappointment”.
NZD/USD Levels
The 20 DMA is 0.8497, the 50 DMA is 0.8363 and the 200 DMA is 0.8183. RSI (14) reads 61.32. Supports are ascending from 0.8516, 0.8533, 0.8565, 0.8590, 0.8620 and 0.8640. Spot is 0.8685 while resistances are 0.8695, 0.8733 and 0.8785.