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November 3, 2021

Why The Kiwi Could Soar Again

Frank Cabibi

11/3/2021

New Zealand's currency has been on a tear after their recent announcement of rate hikes which has sent investors into a buying frenzy trying to price in the future value of the kiwi after a potential 25 bp rate hike on the 24th of this month.

Our outlook

On top of this high outlook from analysts, we are also seeing more demand from institutions. COT data reported a considerable spike in long futures contracts bought by big money last week which was then followed by a drop in price towards the end of the week. With COT on the buyers' side, I think we can see another run higher as we go into the last couple months of the year.

Trade Setups

EURJPY

This pair looks like it tried to come back up to resistance around 1.64873 but the momentum was too weak. If price does end up hitting that level, it could be a promising short setup.

NZDUSD

NZDUSD looks like a promising long on the 1D chart as price hit support at .70900s and is starting to bounce from that level. Price also touched its 200 DMA on this timeframe which served as strong support on this pullback. Higher highs also suggest further moves upward to potentially the June highs.

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