- RBNZ in its economic assessment report released today, called for further easing to address the problem of low inflation.
- NZD/USD hits 1-1/2 month lows at 0.6951 after RBNZ bolstered August rate cut bets, has recovered slightly to currently trade at 0.6971 levels.
- Downside in the pair also supported from the recent strong US data which has resulted in the rise in Fed rate hike expectations in 2016.
- Technically the pair has broken below 50-DMA at 0.70 and we see scope for test of 100-DMA at 0.6915.
- A violation there could take the pair to 0.6835 and then 0.68 levels.
- Momentum studies are bearish, however, stochs are at oversold territory so some caution is advised.
- Our previous call (http://www.econotimes.com/FxWirePro-NZD-USD-holds-major-support-at-07010-further-downside-only-on-break-below-238154) has hit TP1.
Recommend holding for targets.
