• The NZD/USD inched higher on Monday, but gains were limited by expectations of additional monetary easing from the Reserve Bank of New Zealand.
• Thursday's data showed a 1.0% decline in gross domestic product for the September quarter, a sharp drop that vastly overshot market expectations of a 0.2% contraction.
• The unexpected softness in the economy has led investors to price in a 50 basis point rate cut by the Reserve Bank of New Zealand in February.
• Markets are fully anticipating a 50 basis point cut to the Reserve Bank of New Zealand's official cash rate (OCR), lowering it from 4.25%, at the bank's next meeting in February.
• Immediate resistance is located at 0.5675(38.2%fib), any close above will push the pair towards 0.5730(50%fib).
• Support is seen at 0.5604(23.6%fib) and break below could take the pair towards 0.5571(Lower BB).
Recommendation: Good to sell around 0.5670, with stop loss of 0.5780 and target price of 0.5550
