• NZD/USD saw a slight uptick on Monday, but the overall sentiment remained negative amid expectations of more aggressive monetary easing by the Reserve Bank of New Zealand.
• Last week's data showed a 1.0% decline in New Zealand's GDP for the September quarter, a significant drop that far exceeded market expectations of a 0.2% contraction.
• The unexpected weakness in the economy has prompted investors to price in a 50 basis point rate cut by the Reserve Bank of New Zealand in February.
• Markets are pricing in a 65% chance that the Reserve Bank of New Zealand will cut cash rate by 50 basis points at its February meeting.
• Immediate resistance is located at 0.5688(38.2%fib), any close above will push the pair towards 0.5748(50%fib).
• Support is seen at 0.5609(23.6%fib) and break below could take the pair towards 0.5554(Lower BB).
Recommendation: Good to sell around 0.5670, with stop loss of 0.5780 and target price of 0.5550
