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"It's hard at this point to see any factor that would lead to a major depreciation in the exchange rate in the short term. There's no easy solution that says cut interest rates 25 basis points and the exchange rate will go down"
- Graeme Wheeler, RBNZ governor (based on Bloomberg)Pair's Outlook
Dearth of buying pressure around 0.8148 resulted in a yesterday's close price dropping beneath the up-trend support line, implying that a period of kiwi's appreciation relatively to the greenback has come to an end. A pullback to the breached line seems to be a viable scenario and would create new trading opportunities. According to technical indicators the price should pare some of the losses until the end of the week, though the following behaviour of NZD/USD is quite uncertain, since monthly studies are mixed.
Traders' Sentiment
Judging by the stance of SWFX traders towards NZD/USD, the currency pair is oversold to a significant degree, since 72% of positions are short, leaving merely 28% of it to bulls. Also the percentage of sell orders (64%) greatly exceeds the share of buy orders (36%), adding to a negative outlook.
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