NZD/USD: bears well in control on RBNZ policy expectations and announcements

NZD/USD is down from the 0.70 handle in a steep decline within a sell-off to lows of 0.6951 as bets continue to mount that the RBNZ will cut interest rates in the very near future. The following headline explains the drop:

RBNZ: Further easing is likely needed to return inflation goal

So, a decline in the exchange rate was a huge catalyst with more easing likely needed. However, analysts at ANZ explained,"We're still not convinced the economy needs further easing, but acknowledge that it is on its way, explained analysts at ANZ, adding, "But we also feel that it would take a meaningfully lower OCR (to well below 2%) to really alter what is still a solid backdrop for the NZD."

NZD/USD levels

NZD/USD is now in highly bearish territory, below the 50 dma and 70 handle and the ascending support line of mid Junes rally. A break to the 0.68 handle spells game over to the bulls with the 200 dma in sight at 0.6775 currently. To the upside, 0.72 remains the key target and while below there, the outlook remains neutral at best.