10/18/2021
The past week was very good to the kiwi after the Reserve Bank of New Zealand announced interest rate raises and investors are pricing in another 25 basis point hike making a 50 bp move seem more likely according to SeekingAlpha. CPI ran higher than expected this quarter at 2.2% with the expected 1.5%.
Our outlook
A higher CPI could also mean that it is even more likely that the RBNZ will go for a bigger rate hike next year. Because of this, we're already seeing the pair getting this news priced in for what could happen. Although the kiwi had an aggressive move this past week, it still looks strong across the board. And against the Canadian loonie, it looks relatively undervalued.
Trade Setups
NZDCAD
NZDCAD had a strong four trading days and looks to be continuing the move at the beginning of this week. Price is nearing resistance around 0.88200s which is also paired with the 50-day moving average on the 1D chart. Clean support lies below around 0.86200s. If momentum keeps up, we could see a test on the resistance level above which is about a sixth of a percent move away.
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