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Consolidating, Bears Struggle To Sustain Breaks Of $0.62

NZD

Since firming off 2023 lows seen in the wake of the SVB collapse, NZD/USD saw its recovery capped at the 200-Day EMA (0.6277). Support has been evident below $0.62, with bears having struggled to sustain any breaks of this level in recent dealing.

  • We sit at $0.6200/05 currently, slightly above NY closing levels, but with tight ranges to start the session.
  • 1 month risk reversals remain skewed to the downside, (last -0.95), but we are up from mid month lows around -1.35.
  • Rate differentials, observed via 2-year swap rates, sit at ~75bps having narrowed from as wide as ~125bps earlier this month, which has likely helped cap NZD/USD gains ahead of 0.6300.
  • Bulls first target a break of $0.6263 (200-Day EMA) which brings high from 14 Feb at $0.6390 in play.
  • Bears look to break 2023 lows at $0.6085, from here Nov 11 low at $0.5985 is in view.
  • Be mindful of spill over from AU retail sales, which print in about 25mins.
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