In June, we note a reversal of the trend because June is a period when the wave of optimism has ended under the influence of an increasing number of coronavirus infections. Therefore, investors, fearing a second wave of pandemics and stricter quarantines, are again investing in safe assets. Gold is already reaching multi-year highs in price, and as for the yen, its strengthening has become more modest against the NZD. Nevertheless, there are prerequisites for a further decrease.
This week the tendency in favor of safe assets continued. In addition, the NZD was under pressure following the meeting of the RBNZ, where they announced their readiness to take additional measures to stimulate the economy in the future, including negative rates.
It is possible that the New Zealand dollar will receive support next week with the publication of the PMI index of business activity in China, as well as the ANZ index of confidence in business circles in New Zealand. But for now, the background for the NZD remains unfavorable. The recently formed downtrend tends to strengthen. The rates have already tested the support line for its downward shift. Most technical analysis tools also tend to the deals to sell. Therefore, we believe that such deals will be most reasonable in the near future.
