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FxWirePro: NZD/USD trends higher, but faces potential pitfalls

• NZD/USD steadied around 0.5830 on Monday as investors looked ahead to the Reserve Bank’s policy decision this week.

• The Reserve Bank of New Zealand is expected to cut rates by 25 basis points on 8 October, with markets pricing in two additional cuts afterward.

•The Reserve Bank of New Zealand (RBNZ) has already acted and is expected to implement rate cuts in October and November, with a possibility that one of these cuts could be 50 basis points.

•A key challenge for the RBNZ is its dependence on infrequent data releases. Markets will have to wait until 19 October for the critical Q3 CPI report, which is likely to influence rate expectations more than any forward guidance from next week’s meeting.

•  Immediate resistance is located at 0.5870(SMA 20), any close above will push the pair towards 0.5901(50%fib).

•  Support is seen at 0.05812 (Daily low) and break below could take the pair towards 0.5775(23.6%fib).

 Recommendation: Good to sell around 0.5840 with stop loss of 0.5930 and target price of 0.5760

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