NZD/USD: Overhang of extremely large long positions - Westpac

NZD/USD reversed lower this month, mainly due to a rebound in the US dollar, but also due to expectations the RBNZ would sound more dovish at it MPS, explains Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Those expectations were dashed, with the RBNZ delivering a largely unchanged press release and OCR forecast.”

“So now we’re back to watching the US dollar (and risk sentiment), but there is still the overhang of extremely large long NZD/USD positions, according to the CFTC, to clear.”

“We thus adopt a negative outlook for the week ahead, targeting sub-0.73.”