NZD/USD under pressure
NZD/USD is trading to the downside on Friday, testing the $0.7800 mark. On Thursday the pair peaked at $0.7970 (bottom of the bullish weekly Ichimoku), but closed the day much lower at $0.7850. We see that the bulls are not so confident: the kiwi failed to fix above the May-June trend line resistance and 23.6% Fibo from this decline.
Meanwhile, for fundamental reasons Westpac strategists remain bullish for NZD/USD in the coming week, targeting the $0.8060/0.8180 area (38.2 and 50% Fibo). However, they expect the pair to reverse from these highs and the three-month downtrend to resume to the levels below $0.7700.
HSBC strategists also believe the kiwi may be exposed to further weakness in the coming months given "the RBNZ uneasiness at the strength of the kiwi and the prospect of Fed tapering". However, there is a high chance of RBNZ to begin raising rates by the year-end - this should prevent any weakness from becoming substantial.
Chart. Daily NZD/USD