NZD/USD near term outlook shifted to negative

By WESTPAC

After topping at 0.8422 in yesterday’s session, the kiwi has been falling since then along with an increasing risk aversion trade. The high-yielder is now trading well below the 0.8300 mark, as fears circling Greece are weighting on the market sentiment on Thursday.

In the view of S.Callow, analyst at Westpac, the cross is showing overbought readings and momentum is pointing south at the moment. He also comments that a solid break below the 0.8300 level (multi-month ascending channel) is needed as a confirmation sign for further downside.
The failed attempts of the S&P500 to break above recent highs are reinforcing the idea mentioned above, as the US benchmark is extremely well correlated with risk-on trade.

“We switch our near term bias to a cautious negative one following the unimpressive price action during the past two weeks”, the expert concluded.

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