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NZD/USD gives Aug 2011 low another shot

© Dukascopy Bank SA
"The resulting extra downward pressure [from diminishing GDP growth] on underlying inflation will prompt RBNZ to cut interest rates by more than the markets expect, to 2.75%. The result will be a further weakening in the New Zealand dollar, perhaps eventually to US$0.60." 
- Capital Economics (based on WBP Online)

Pair's Outlook 

The New Zealand Dollar misbehaved on Monday, as it appreciated against the US Dollar, rather then plunging. Worse-than-expected US fundamentals most likely influenced the NZD/USD pair's positive outcome. However, the 0.70 psychological level prevented the climb and is likely to do so again today, forcing the Kiwi to resume the bearish trend. The August 2011 low at 0.6949 remains the target for today; while little chance of a slump beyond the low exists, as technical indicators retain mixed signals. 

Traders' Sentiment 
Market sentiment weakened again, with 43% of traders now having a positive outlook towards the Kiwi. The portion of orders to acquire the NZ Dollar increased; they now take up 47% of the market.
© Dukascopy Bank SA

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