FxWirePro: NZD/USD neutral in the near-term, scope for downward resumption

• NZD/USD held near recent lows on Tuesday, as overall sentiment remained negative amid expectations of further aggressive monetary easing by the Reserve Bank of New Zealand.

• The Kiwi dollar has weakened by nearly 11% against the US dollar this year. It had reached $0.6379 in September before dropping to as low as $0.5608 earlier this month.

• The surprise economic weakness has driven investors to anticipate 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 0.5676(38.2%fib), any close above will push the pair towards 0.5733(50%fib).

•  Support is seen at 0.5617(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