NZD/USD falls precipitously

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"Our main scenario is that the Fed will begin tapering in September. If the Fed shows any concerns about low inflation or that they need to see a further improvement in the labour markets before tapering it could send the dollar lower."
- Danske Bank (based on CNBC)

Pair's Outlook

The currency couple has already reached its initial target—the monthly pivot point, now it may set the course towards some of the other supports, such as the one at 0.7731, where the major trend-line (in force since early 2010) is going to resist further decline, while there is still potential for the kiwi to drop even lower, down to the levels seen in 2011 and 2012.

Traders' Sentiment
There was a significant shift in the attitude towards the New Zealand Dollar. Yesterday in all kiwi crosses 40% of positions were in its favour, today there are 44%. Particularly in NZD/USD this was shown by a further reduction in short positions that now take up 52% of the market (59% 24 hours ago).
© Dukascopy Bank SA

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