Trade of the week

MS recommends selling NZD/CAD at market with a target of 0.8400 and a stop at 0.9120.
MS is already short NZD* against the EUR in its FX Strategic portfolio but still sees further weakness for the currency on the crosses especially after the final election result from New Zealand and the weakness in NZ economic data.
"We have chosen to pair the short NZD vs the CAD as the currency has retraced significantly already and economic data in Canada continues to hold in well.
...NZDCAD is not far from making new lows for the year, opening room for further downside for this pair. NZ house price rises have started to slow.

According to the CFTC, the market is still long the NZD even as the currency has started to weaken and US rates go up," MS argues

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