FxWirePro: NZD/USD downside pressure builds, key support level in focus

• NZD/USD slipped lower on Tuesday as investors reduced their expectations for interest rate increases in the coming year.

•  RBNZ Governor Anna Breman signaled on Monday that interest rate hikes are off the table for now, reinforcing expectations that monetary policy will stay accommodative.

• RBNZ Chief warned that financial market conditions have tightened in recent weeks, prompting investors to scale back rate hike expectations for next year.

• Swaps now imply that rates will remain on hold until the second half of the next year, with a hike not fully priced in until   compared with September a day earlier.

•  On the data front, New Zealand is scheduled to release its third-quarter GDP figures on Thursday, which will provide insights into the country’s economic growth.

• New Zealand GDP (Q3) is expected to have grown 0.8%, double the pace projected by the RBNZ in its November statement; the report is due on Dec. 18.

 •  Immediate resistance is located at 0.5829(50%fib), any close above will push the pair towards 0.5876(Higher BB).

•  Support is seen at 0.5731(SMA20) and break below could take the pair towards 0.5715 (38.2%fib).

 Recommendation: Good to sell around 0.5790, with stop loss of 0.5850 and target price of 0.5720