NZD/USD: staying on the front foot ahead of Tokyo, testing 0.7080

NZD/USD has started off on the front foot in broad-dollar weakness. Testing 0.7080, a break higher puts the bird back on course in its northerly trajectory since end of May lows down at 0.6675. 

NZD/USD has been better bid on the back of the boost from the RBNZ earlier in the month that stayed the course offering via a more upbeat assessment of the domestic and global economies earlier in the month. However, for the week ahead, it is all about either Bremain or Brexit, or whether the referendum will go ahead at all?

Petition to cancel Brexit referendum gathers momentum

NZD/USD forecasts

Analysts at Westpac have stated that they are sticking with the view that NZD/USD will decline later this year, targeting 0.65, based on the assumptions the RBNZ will cut to 2.0% and the Fed will tighten once. "That view has been hurt by a soggy US economy in Q1, a seemingly reluctant Fed, and very weak jobs data. However, we expect the Fed will see enough evidence of improvements in the labour market by Sep to warrant a hike. That is not fully priced, nor is an RBNZ cut in August. Surprises on both fronts should be NZD/USD negative," explained the analysts.

NZD/USD levels

0.7150 remains the upside target, with 0.6960 the near term downside target. Immediate resistance is located at 0.7100 and the near term support is located at 0.7020 below the 4hr 20 sma at 0.7040.