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NZD/USD undergoes a correction

© Dukascopy Bank SA
"The RBNZ's June monetary policy statement and official cash rate decision will be more intensely scrutinised than normal, largely because of differing opinions on what the bank will/should do at this point in time." 
- UBS New Zealand (based on The New Zealand Herald) 


Pair's Outlook 
Last Friday, the New Zealand Dollar sustained heavy losses, as the 2011 low failed to stop the fall. As a result, the Kiwi dropped to 0.7023, but closed trade slightly higher at 0.7045. Today we expect the NZD/USD pair to rebound, despite technical indicators retaining bearish signals. A small correction should occur, with the nearest resistance located at 0.7089, namely the weekly PP, but it is unlikely to be reached. The trading session is to end around 0.7057; however, we should not rule out the possibility of a drop to 0.70. 

Traders' Sentiment 
SWFX traders' sentiment weakened once more, as only 38% of all positions are long (previously 46%). The share of commands to acquire the Kiwi dropped from 56 to 36%.
© Dukascopy Bank SA


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