FxWirePro: NZD/USD hovers near six-month low, further downside likely

• NZD/USD hovered near six-month low on Wednesday  as investors digested comments from RBNZ chief economist Paul Conway.

• A senior official said on Wednesday that New Zealand’s central bank may consider additional rate cuts if needed but will wait to evaluate future economic indicators first.

• The Reserve Bank of New Zealand’s Chief Economist Paul Conway described this month’s 50-basis-point reduction in interest rates to 2.5% as “very finely balanced,” citing inflation’s proximity to the upper limit of the 1%–3% target band.

• Markets imply around an 83% probability of a rate cut to 2.25% in November, with some betting on a terminal rate of 2%.

•Despite the day’s modest uptick, NZD/USD remains locked in a firm downtrend since early July, suggesting that downside risks are not yet exhausted.

•  Immediate resistance is located at 0.5764(38.2%fib), any close above will push the pair towards 0.5796(SMA 20).

•  Support is seen at 0.5689(23.6%fib) and break below could take the pair towards 0.5669(Lower BB).

 Recommendation: Good to sell around 0.5740 with stop loss of 0.5800 and target price of 0.5680