NZD/USD: 0.7480's on the cards?

Currently, NZD/USD is trading at 0.7403, up 0.08% on the day, having posted a daily high at 0.7408 and low at 0.7395.

NZD/USD continues to ride the peripheral weakness in the greenback and analysts at Westpac suggest for today's outlook there is potential to continue this rally to 0.7485 (Sep 16 peak) during the next few days.

RBNZ expected to remain sidelined until H2 2018 – UOB

NZD/USD 1-3 month:  

On a wider outlook, the analysts figure that the Fed’s tightening cycle plus US fiscal expansion should eventually reassert upside pressure on US interest rates and the US dollar, pushing NZD/USD to 0.6800 by year end. US factors should outweigh local factors which are mostly supportive (25 May).

Moreover, the analysts finished, " We think that the market is off-base in pricing in an OCR hike for next year, even if the timing has been pushed out from June to August since the CPI figures. In contrast, we don’t expect an OCR hike before 2019, and that sort of horizon is too far out to be specific about the timing."

NZD/USD levels

Support: 0,7430,0.7386, 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. Resistance: 0.7415, 0.7480, 2nd Sep high.

"Longer term, if NZ-US yield spreads decline towards zero by year end, then NZD/USD should retreat to 0.70 or lower," explained the analysts at Westpac.