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NZD/USD trims gains, holds above 0.7800

FXStreet (Córdoba) - After reaching a daily high during the Asian session at 0.7925, NZD/USD lost strength and pulled back. During the American session extended the movement and bottomed at 0.7835. Then bounced and it was trading at 0.7865, with a gain of 85 pips for the day.

Despite moving away from the highs and amid risk aversion, the kiwi was on track to have the best day in three months against the US dollar. The New Zealand dollar was among the best performers across the board.

NZD/USD rally, just a correction

On a short term perspective, momentum favor the kiwi but on a wider view, the dominant trend continues to be bearish. The Westpac Global Strategy Team retains a negative bias for the week ahead in the pair. “NZD/USD experienced a stunning 13% fall in September, and is now technically oversold. Admittedly it can remain stretched for some time, but at the very least there is
a warning a correction looms”.

The correction should not be sustained over time, notes Westpac, considering that milk prices continue to dive, inflation remains lows and RBNZ is likely to remain on hold.

USD/JPY has scope to test the highs again yet

USD/JPY is trading at 108.51, down -0.37% on the day, having posted a daily high at 109.13 and low at 108.32.
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