ING FX Strategy Research argues that NZD/USD is a sell on rallies ahead of ‘perfect storm’ of rising yields & political risks.
"With speculative markets still significantly net long NZD and signs of any political risk premium yet to reach extreme levels, we suspect a narrower focus on the 23 Sep elections could spell further weakness for NZD
A US data-led recovery in $ sentiment could see NZD/$ temporarily undershoot our 0.71 forecast for 3Q17 – with a break of the 200-DMA (0.7130) supporting this view.
Even worse, under a “perfect storm” of rising DM yields and greater domestic political uncertainty, we think NZD/USD could drop towards the 0.68-0.69 lows seen in 2017. Our view is that NZD looks a sell on rallies," ING argues.
Source: ING Global Markets ResearchOriginal Article
