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13 Jun 2013
Flash: NZD/USD risks further downside near term - HSBC
FXstreet.com (Barcelona) - NZD/USD is on shaky grounds, and further downside near term is expected, says the HSBC FX Team.
HSBC notes that its Positioning Indicators show that speculators still have a bias to remain long of NZD/USD, "which for much of the last year this had been coupled with NZD-USD surging higher – aligning the momentum community with the fundamental community" the bank said. However, that environment has dramatically changed for the momentum community, and if sentiment from fundamental traders suddenly changes, "this will lead to a sharp and aggressive sell off in the NZD/USD" HSBC notes.
HSBC believes that the RBNZ’s determination for a weaker NZD/USD and its intermittent interventions in the FX market "will cause speculators to question whether the Kiwi can remain resilient" the bank comments. If that occurs, "NZD/USD will be in for a further lurch lower" HSBC concludes.
HSBC notes that its Positioning Indicators show that speculators still have a bias to remain long of NZD/USD, "which for much of the last year this had been coupled with NZD-USD surging higher – aligning the momentum community with the fundamental community" the bank said. However, that environment has dramatically changed for the momentum community, and if sentiment from fundamental traders suddenly changes, "this will lead to a sharp and aggressive sell off in the NZD/USD" HSBC notes.
HSBC believes that the RBNZ’s determination for a weaker NZD/USD and its intermittent interventions in the FX market "will cause speculators to question whether the Kiwi can remain resilient" the bank comments. If that occurs, "NZD/USD will be in for a further lurch lower" HSBC concludes.