NZD/USD is one of the several majors we’re tracking to try and catch the end of its retracement against USD strength. With NZ employment figures, FOMC and NFP nearby, we expect volatility to be reinstated.
We’re leaning towards an RBNZ cut in May so NZ employment figures overnight could be key. Furthermore, with a slightly dovish FOMC meeting expected, it may only take a neutral tone to see USD strength return and help keep a lid on NZD/USD’s retracement. And, as large speculators have flipped to net-short and far from a sentiment extreme, we suspect the path of least resistance could be lower for the Kiwi.
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