NZD/USD: some personal doubts
Kira Iukhtenko, analyst at FX BAZOOKA
In the European trade the New Zealand dollar erased gains on stronger-than-expected labor market data, retracing from the tonight’s highs of $0.8260 back to $0.8200.
Kiwi’s prospects are broadly discussed these days. Despite the recent RBNZ pledge to hike rates in March, NZD remains in bearish channel formed in November. In a long term (1-2 months) I join the kiwi bulls and expect the technical triangle (well-shaped on a monthly chart) to be broken to the upside.
However, in a shorter prospective I have some doubts on the kiwi’s imminent growth. In the coming weeks I see more room for bears in NZD/USD and expect the pair to dip before starting a pre-March uptrend. A return below $0.8100 could open the way to $0.7900.
The pair needs a weekly close above $0.8200 to confirm the bullish dominance is more or less sustainable. But even that won’t guarantee a further strength, in my view. A rise above $0.8330 is needed to make the picture unconditionally positive.
Your ideas on the issue are welcome.
Chart. Daily NZD/USD