NZD/AUD: Likely test of key support at 0.8800 – Westpac

Imre Speizer, Senior Market Strategist at Westpac, suggests that the NZD/AUD cross is consolidating in a 0.8850-0.8950 range ahead of a likely test of key support at 0.8800.

Key Quotes

“The Australian calendar’s quiet period for data extends until Thu 31 Mar when we see Feb private sector credit, not a market mover anyway.

3 months: Our main argument for a lower cross (sub-0.89 multimonth) is the RBNZ is expected to ease again by June, whereas the RBA should remain on hold for some time. In addition, demand for AUD should get a boost from M&A activity. Risks to this view include the performance of the Chinese stockmarket and global commodities, which typically affect the AUD more than the NZD.

1 year: We expect the cross to trade at 0.87 or below in a year’s time, the interest rate spread expected to favour the AUD.”

Imre Speizer, Senior Market Strategist at Westpac, suggests that the NZD/AUD cross is consolidating in a 0.8850-0.8950 range ahead of a likely test of key support at 0.8800.

(Market News Provided by FXstreet)