FxWirePro: NZD/USD outlook weaker on renewed downside pressure

• NZD/USD dipped  on Monday, as the New Zealand dollar continued to be weighed down by dovish expectations for the Reserve Bank’s monetary policy.

• last week data  showed,  New Zealand’s GDP contracted 0.9% in Q2, a steeper drop than the 0.3% decline projected by both analysts and the RBNZ

•The unexpectedly sharp contraction has heightened expectations for a more aggressive rate cut in October

•  Investors have fully priced in a 25-basis-point cut to 2.75% by the Reserve Bank of New Zealand in October, with around a one-in-four chance of a 50-basis-point reduction.

•  Immediate resistance is located at 0.5900(50%fib), any close above will push the pair towards 0.5907(SMA20).

•  Support is seen at 0.5818(Lower BB)and break below could take the pair towards 0.5801(61.8%fib).

 Recommendation: Good to sell around 0.5870 with stop loss of 0.5950 and target price of 0.5800