The Antipodean currencies are having a horrid month since mid-July and there seems to be little reprieve. Economists at TD Securities analyze NZD outlook.
There is little going for the NZD
We note that antipodean currencies are trading more closely with China’s growth narrative, risk-off sentiment and lower equities than the domestic story, and recent price action reflects that. We don’t expect any of these factors to show a reversal anytime soon, which casts doubt on any significant rebound for the NZD in the near term, and we favor selling the NZD on the rally rather than shorting it as the NZD is oversold. Zones based on RSI daily.
We like selling rallies near the 20-DMA at 0.61254 and target the 23.6% Fib level at 0.5785 judging by daily Fib levels over the past year. MACD divergence isn’t showing any signs of a turn, and we think fundamentally, there is little going for the NZD.
