We are about to see a very bad NZD price outlook, I will try to explain my reasoning here. The NZD is currently showing very weak range support of 88 and over 92. I am predicting a further fall to the low 90s. Many investors will be very surprised when this situation occurs, as a market reversal could occur.
Some people feel that the currency will rise to meet the US dollar, this is not the case, in fact it may actually fall if it meets this strength. The NZD can reach as high as US$100 within two weeks. This is not too far from where we have been in the last few years. It is not likely to act on the same course as the dollar does, but it can reach as high as US$140 again.
This makes the New Zealand dollar more attractive for all investors around the world, except for those living in the United States. Most of the wealth around the world will continue to move to New Zealand. Even though the US dollar may be weaker, it will never recover to a strong position.
A lot of new investors may want to take part in the NZD, but many will be waiting for a reversal in the USD. This could happen sooner than later, it may occur as soon as tomorrow or next week.
Many countries around the world are under some pressure, from falling currency, financial turmoil, inflation and many other problems. There are some investors that are standing firm in their opinion that the US will not rebound. There are investors that believe in the bearish views.
The NZD is now up almost 24% against the US dollar, this puts it on a par with other currencies around the world. You cannot be too scared, it could take some time for this bearish view to show some weakness. But it is only in the late stages of the cycle, and this could mean a correction in the NZD price, it will certainly not regain its previous highs, this is why most investors will have to be patient.
This time there is no one to blame, and we know that New Zealand has had some hard times. However the economy is much stronger than it was at the end of last year. It is just a question of time until the markets recognize this reality and act accordingly.
This is why it is important for anyone who owns any New Zealand equity to be aware of what is going on. I will discuss a few indicators and indications that investors should look out for. They include the current range support of 88 and over 92, I will explain why, the recent strength which has continued to this day, the following are the points that you should take note of.
First, the large parts of the nation, even in Auckland, are experiencing an increase in tourism and retail sales. The New Zealand dollar has become the major driver in this part of the world. Many visitors and tourists have been attracted to the country due to this strong currency. It has therefore been very encouraging for the economy.
Second, Rongotai Airport has seen more traffic than it has in the past. This is due to the strong dollar, this has been a factor that has led to a strong recovery of many business sectors.
Finally, the NZD continues to appreciate, this shows that the New Zealand economy is on the upswing. If the New Zealand dollar falls below 88 this will mean that the country is experiencing deflation, this will mean that the currency will be trading towards the middle of the range.