Near oversold conditions – OCBC

New Zealand Dollar (NZD) continued to trade with a heavy bias near recent low. Pair last seen at 0.5808 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.

RBNZ’s dovish cut reinforces a downside bias for NZD

“Bearish momentum on daily chart intact but RSI is at oversold conditions. Support here at 0.58 (50% fibo retracement of Apr low to Jul high), 0.5730 (61.8% fibo). Resistance at 0.5830 (200 DMA), 0.5880 (38.2% fibo).”

“RBNZ’s dovish cut and lower OCR track reinforce a downside bias for NZD, and the magnitude of the move going forward will hinge on the USD leg. Powell’s Jackson Hole speech on Friday night is likely to shape Fed easing expectations into September and that is likely to impact Kiwi’s near-term directional bias.”