Westpac - Bullish Bias For #NZDUSD

Imre Speizer, Senior Markets Strategist at Westpac, suggests that we have flipped to a bullish bias for the week ahead and if today’s break above 0.6455 is sustained, then the 0.6600 area should be targeted.

“NZ data has been upbeat lately, notably dairy prices which look set to rise again at this week’s GDT auction. In addition, US data has not been compelling enough for markets to price in a rate hike this year.”

“3 months ahead : The next major target area is 0.62, a level which provided support during the middle of 2009. The two main factors expected to contribute to NZD/USD weakness during the next few months are RBNZ easing (we expect the OCR to fall to 2.5% by year end and eventually to 2.0%) and eventual Fed tightening. Disappointments on either of these fronts would call into question our multi-month bearish view.”

“1 year ahead: Our 1 year ahead forecast is 0.62, based partly on the OCR being cut to 2.0%.

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