Citi shifts its bias to tactically bearish on NZD/USD (bullish USD) in the near-term, but stays core bullish on NZD and AUD over the medium-term.
"It’s been a long week after the Ardern government announcement to curb the housing bubble. We’re now tactically bullish with USD amid the current risk-off sentiment in the FX market, so we don’t rule out the risk that NZDUSD continuously declines to the 200d MA (around 0.687) in the near term, after dropping below the 100d MA this week. ," Citi notes.
"That being said, we remain structurally bullish with high-beta currencies like AUD and still believe NZD could also recover from this housing shock in the medium term," Citi adds.