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27 Feb 2015
NZD/USD upside bias towards 0.7600-0.7700 near-term – Westpac
FXStreet (Barcelona) - Imre Speizer of Westpac, gives the outlook for NZD/USD, anticipating an upside move for the pair in the near-term in the 0.7600-0.7700 range, but medium-term outlook remains bearish towards 0.71.
Key Quotes
“The picture here is mixed. Classical chartists will point to the major resistance area between 0.7610 and 0.7620, those levels being lows formed on 9 December and 5 January, respectively. The rally which started on 3 February reached 0.7613 and was then rejected - textbook stuff, suggesting resistance there is strong and could spell an end to the rally.”
‘”Elliot wave followers will point to the rally being a 62% retracement of the preceding decline - enough of a correction to allow the dominant negative medium term trend to resume now.”
“Daily momentum indicators (such as the RSI) are more constructive, merely slowing during the past few days but still pointing upwards.”
“Combining the above yields an ambiguous near-term technical outlook currently - there may be a bit more energy in this rally or it may have expired. However, the above is consistent with our medium-term outlook, which sees NZD/USD fall further to 0.71 by mid-year.”
“Assuming the US dollar continues to remain in consolidation mode during the next week or two, the expected evolution of NZ fundamentals argues for a higher NZD/USD near term.”
“We thus forecast a push into the 0.7600-0.7700 range, where we will be turning our thoughts to creating a medium-term short position.”
Key Quotes
“The picture here is mixed. Classical chartists will point to the major resistance area between 0.7610 and 0.7620, those levels being lows formed on 9 December and 5 January, respectively. The rally which started on 3 February reached 0.7613 and was then rejected - textbook stuff, suggesting resistance there is strong and could spell an end to the rally.”
‘”Elliot wave followers will point to the rally being a 62% retracement of the preceding decline - enough of a correction to allow the dominant negative medium term trend to resume now.”
“Daily momentum indicators (such as the RSI) are more constructive, merely slowing during the past few days but still pointing upwards.”
“Combining the above yields an ambiguous near-term technical outlook currently - there may be a bit more energy in this rally or it may have expired. However, the above is consistent with our medium-term outlook, which sees NZD/USD fall further to 0.71 by mid-year.”
“Assuming the US dollar continues to remain in consolidation mode during the next week or two, the expected evolution of NZ fundamentals argues for a higher NZD/USD near term.”
“We thus forecast a push into the 0.7600-0.7700 range, where we will be turning our thoughts to creating a medium-term short position.”