• The NZD/USD held near two year low on Friday as kiwi dollar remained under pressure from stronger dollar and weaker-than-expected third-quarter New Zealand GDP data.
•Thursday's data showed that gross domestic product fell 1.0% in the September quarter compared to the previous quarter, far exceeding market expectations of a 0.2% contraction.
• Surprisingly weak reading on the New Zealand GDP fuelled bets for more aggressive policy easing.
• Markets are fully expecting the Reserve Bank of New Zealand to cut its official cash rate (OCR) by a substantial 50 basis points, lowering it from 4.25%, at its next meeting in February.
• Immediate resistance is located at 0.5700(38.2%fib), any close above will push the pair towards 0.5779(50%fib).
• Support is seen at 0.5607(23.6%fib) and break below could take the pair towards 0.5586(Lower BB).
Recommendation: Good to sell around 0.5650, with stop loss of 0.5720 and target price of 0.5530


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