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  • NZD/USD: is stabilising  ahead of key support levels.  
  • NZD/USD:  RBNZ Financial Stability Report and  key takeaways:

NZD/USD is currently trading at 0.6894 having made a low of 0.6892 sliding from 0.6941 in yesterday’s trade in Asia. Most of the damage was done in European trade in the that market’s bloodbath on Tuesday as investors wake up to the systemic risks of a European  meltdown.

Analysts at ANZ explained  that “the Italian concerns roiled markets overnight and sent the kiwi lower after a brief attempt above 0.6950”, adding, “However, the move down has been relatively modest all things considered, with the sharp falls in US yields perhaps cushioning the downside. Recently, the kiwi has struggled to push much below 0.69.”

RBNZ Financial Stability Report

In more recent trade,  RBNZ’s Governor Orr has said that the general picture has a very moderate outlook for house prices with the outlook on house price inflation to average between 2%-3% in approaching few years.

As for the RBNZ Financial Stability Report where the financial system’s outlook remains sound, here are the key takeaways:

  • The financial system remains sound.
  • There are sufficient capital and liquidity buffers in the banking system.
  • Household mortgage debt remains at a high level, although financial risks have lessened.
  • To leave LVR restrictions unchanged.

NZD/USD levels  

Key support is located at 0.6880 while resistance is located at 0.6980.  To the upside, 0.6960 and 0.6980 mark key levels of interest, (21-D SMA 0.6948) ahead of 0.7080. However, NZD/USD remains below the 200-month moving average  resistance  at 0.6980 and weekly technicals remain bearish. RSIs are biased to the downside. Below 0.6850, 0.6780 comes as next downside target meeting the lows of mid-Nov 2017.