Why NZD Will Weaken Against The EURO...

I suppose many traders will be wondering why I am going against the news this time. It is because I believe that NZD will weaken against the EURO, at least temporarily, in the short-term. The RNBZ believes that beyond the medium term, the corona virus will have little impact on its economy. It will only impact the 1st half of 2020 and that the economy will be on track to outpace growth in the 2nd half of the year of 2020. Surely, that is fine, but sentiment will drive these markets in the short-term. Looking at yield spreads, it seems that there is no anomalies; however, it does seem that the spread is on the brink of a fall. Leading signals are mixed.

So, for now, this will be a technical trade: buy at support and sell at resistance.