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  • NZD/USD is currently trading a touch below the 0.66  handle  on a strong spike to the downside in early Asia from 0.6623 down to a low of 0.6593.  
  • NAFTA headlines lifted the commodity complex despite a better bid dollar environment – but now the bears  can target 0.6570 ahead of 0.65 the figure.

This is a sudden development in the pair where otherwise, the pair had been riding the coattails of a risk on vibe whereby the NAFTA headlines lifted the commodity complex despite a better bid dollar environment.  

“The kiwi was largely side-lined overnight, with the focus elsewhere. Today’s QSBO survey will be watched to see if it corroborates other weaker domestic data. If it shows better signs (or even ‘less bad’ signs), kiwi is vulnerable to a squeeze higher,” analysts at  ANZ Bank New Zealand Limited  explained.

RBNZ to cut rather than hike

“We continue to believe that on balance the next OCR move is more likely to be a cut than a hike, though more “hard” evidence of a slowdown would be required to shift us from our flat track. Uncertainty persists regarding the degree to which firms will follow through on their downbeat intentions,” the analysts at ANZ argued.

NZD/USD levels

Support 0.6590. Resistance 0.6720.

The bird has dropped below 0.66 the figure, (a 50%  fibo  extension level of the early Sep extension’s retracement down at 0.65 the figure to 0.6699, the 21st Sep high). The pair was capped at 0.6639 on Friday, (the 38.2% fib of same 0.65/6699 range) where the bulls need to get above there and clear the stop territory for a continuation to the upside. Meanwhile, immediate support is located at 0.6590 and being tested. The bears  can target 0.6570 ahead of 0.65 the figure.