Kiwi Will Not Recover After That
NZDUSD failed to break 0.7330 resistance level a week ago, and since that time we saw only shy attempts of recovery. It means the market doesn't believe in NZD, and even the recent USD weakness won't be able to help the pair to rise again.
And this case was confirmed today by fundamentals. Despite quite positive comments from Reserve Bank of New Zealand governor, there was one negative factor for NZD. Wheeler said that a lower New Zealand dollar is needed to increase inflation and support the stable growth.
That's not a hint, it's a clear call-to-action and message to the market - there is no use buying NZD now. And if the target is not reached, RBNZ may go even further with monetary policy changes in order to weaken the national currency.
In this environment we expect further weakness for NZDUSD with initial target at 0.7170 followed by 0.7130.
And this case was confirmed today by fundamentals. Despite quite positive comments from Reserve Bank of New Zealand governor, there was one negative factor for NZD. Wheeler said that a lower New Zealand dollar is needed to increase inflation and support the stable growth.
That's not a hint, it's a clear call-to-action and message to the market - there is no use buying NZD now. And if the target is not reached, RBNZ may go even further with monetary policy changes in order to weaken the national currency.
In this environment we expect further weakness for NZDUSD with initial target at 0.7170 followed by 0.7130.
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