• NZD/USD remained pinned near a four-month low on Thursday as kiwi dollar extended its decline as markets braced for more policy easing.
• The policy outlook shifted sharply after the RBNZ cut rates to 3.0% on Wednesday and signaled the need for additional stimulus.
• Markets and economists now anticipate at least two additional rate cuts to 2.5%, with the possibility of deeper easing if growth fails to rebound as the RBNZ expects.
• Following the policy shift, the benchmark two-year swap rate slid 18 bps to 2.90%, setting the stage for a decline in fixed-rate mortgage costs.
• At GMT 05:33 the New Zealand dollar was down 0.02% to 0.5814against the Greenback
• Immediate resistance is located at 0.5909(50%fib), any close above will push the pair towards 0.5926(SMA 20).
• Support is seen at 0.5815 (61.8%fib)and break below could take the pair towards 0.5783(Lower BB).
Recommendation: Good to sell around 0.5850 with stop loss of 0.5900 and target price of 0.5760
