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"The Reserve Bank of New Zealand will start hiking interest rates in April next year."
- Imre Speizer, Westpac Banking Corp. (based on Bloomberg)
Pair's Outlook
Given that NZD/USD is currently trading above the monthly pivot point and the 55-day SMA, there is a possibility that the currency pair will be able to advance up to the next monthly resistance at 0.8472. On the other hand, the outlook on the Kiwi is negative, implying that the down-side risks are significant and the support at 0.8332/19 may fail to initiate a rally.
Traders' Sentiment
Regardless of the recent recovery in NZD/USD, the market stays strongly convinced that the New Zealand Dollar is going to soften relative to the U.S. Dollar—right now 72% of positions are short. At the same time the distribution between the buy (67%) and sell (33%) orders is skewed towards the former.
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