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Kiwi – Heading to 7500?
Not all is well in the land of the Hobit as New Zealand’s export sector so heavily dependent on milk exports is seeing the price of milk continue to decline. Today Fonterra the milk conglomerate announced its forecast for 2015 and prices are expected to fall by -13%. That is not good news for the New Zealand economy and is likely to keep RBNZ on the sidelines for the time being. As a matter of fact the RBNZ which clearly wants to see the currency lower may even hint that it may be open to a rate cut if growth slows down materially. All of this is likely to pressure the kiwi further and could send the unit towards 7500 in the near future.
NZD/USD now finds itself testing the recent lows at 7650 and a break of 7600 would open a run towards the key 7500 support . The pair has very heavy resistance at the 7900 level and does not break its bearish bias until it can clear that barrier.