NZD/USD: mixed outlook in the short term from here

Currently, NZD/USD is trading at 0.7505, down -0.13% on the day, having posted a daily high at 0.7516 and low at 0.7504.

The antipodeans are dubiously high and analysts are beginning to call for lower levels. Analysts at Westpac suggested that the bird is vulnerable to correcting further towards 0.7400. 

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On a medium term outlook, the analysts noted that the stretched technical indicators and stretched long positioning argue for a decent downward correction, but added that until the broad US dollar starts to recover from its seven-month old decline, the NZD can remain elevated. "Eventually if the Fed’s normalisation cycle pushes US interest rates and the US dollar higher, NZD/USD could fall to 0.6800 by year end (28 July)," argued the analysts at Westpac. 

However, analysts at ANZ came with a slightly more bullish view, "The NZD’s strength has surprised many and frustrated a few folks as well, but it is close to where we see fair value, and with the USD unloved, we can’t rule out further topside, even if the economy could do with it being weaker."

NZD/USD levels

The 21st July high was 0.7557. On follow through, 0.7744 were the April 2015 highs ahead of the opening highs for that year at 0.7889. To the downside, however, below the 0.7500 psychological level, 0.7460 was Friday's 10-month high and 0.7485 was the September high. Further out, the next supports are 0.7459, 0.7400, 0.7386, 0.7280, (11th July high), 0.7205/06 June 22/21 lows; 0.7186 June 15 low; 0.7150 June 5 high; 0.7127 June 6 low. On the wide, on a break below 0.7080/00 opens 0.6970.