Goldies with chapter and verse on the RBNZ

Goldman Sachs expect 3 rate cuts of 25bp apiece in Aug, Nov and Mar. Their reasoning;

"In a scheduled "Economic Update" published on Thursday, the RBNZ signalled a significant strengthening in its easing bias, and dovish shift across its views on domestic inflation and domestic/global growth. At the heart of many of these changes is renewed concern about the elevated NZD. In our view, these changes make clear that the RBNZ is positioning for a deeper easing cycle, notwithstanding ongoing risks to financial stability from rising house prices."

Totting it all up into dollars and cents, they see NZDUSD at the following levels;

  • 0.68 3 months

  • 0.64 6m

  • 0.62 12m

The kiwi has been on an interesting ride and we're back in the 2015 channel.

NZDUSD daily chart

We're just messing around with the 55 dma right now but the 0.6960/70 level is the key one to watch. Below that there's another strong level at 0.6884 but the 100 dma sits just above there at 0.6915 which may offer some good extra protection to the 0.69 big figure.

With the RBNZ expected to act soon we're well into rally selling mode, and a run up to 0.7000/20 and 0.7050 look the perfect spot to get into shorts.

Our friends at eFX News has the note from Goldies. Check them out here.