NZD: Demand for local bonds returns and Kiwi starting to look good on the crosses
- AUD/NZD consolidating below 1.2000 and further losses towards 1.1500 expected.
- NZD/JPY and NZD/CHF building bases above 75.50 and 72.00 respectively.
- Demand seems to have been picking up during the Asian session with FXWW888 reporting the return of demand in the bond markets.
- Most recent falls have been in overnight trade, which suggests to me that speculative accounts are still selling, thereby increasing the chances of some sharp short-covering rallies.
For those NZD bulls out there, AUD/NZD looks like the ‘safest’ play (wrong above 1.20) whilst NZD/CHF could offer the best risk-reward possibilities.