NZD/USD: holding above 21-h SMA, more downside to go?

• Politics continues to be a bearish factor for the Kiwi.
• Kiwi a little lower on Trade Balance for September arrived as at a deficit of 1143m, a miss expected -900m prior -1179, revised from -1235m.

NZD/USD has consolidated the minor correction above the 21-h SMA in early Asia after a drift to the downside throughout recent sessions, extending the slide from above the 0.70 handle. Currently, NZD/USD is trading at 0.6886, down -0.03% on the day, having posted a daily high at 0.6895 and low at 0.6884.

Forex today: US dollar down 0.3%, risk-off hits higher betas, US yields/politics the driving force

The bird is being pressured by the opinion of the markets that continues to view NZ political developments negatively. Analysts at Westpac argued that there is the potential for this decline to reach 0.6850 and then 0.6820 (May low) if the US dollar’s recent recovery persists. 

NZD/USD 1-3 month: 

On a wider scale, the analysts at Westpac suggested that if the RBNZ remains firmly on hold, as they expect, and the US dollar rises on the delivery of a Fed interest rate rise in December, then NZD/USD should fall below 0.68 by year-end. 

AUD/NZD: mixed outlook in 1.1160 and 1.1280 range - Westpac

NZD/USD levels

The bears took out 0.6908, the 11th April low and now target a close below 0.6880 eyeing 0.6817 10th May 2017 lows. The low of 0.6861 marries up with the 22nd Dec lows in 2016. Daily RSI is deeper into oversold territory below 30 at 26 while the FXStreet Technical Confluences Indicator shows that 0.6870 could be a tough area of support as the daily pivot point. On a correction/reversal, the bulls have a lot of legwork to do to get anywhere near out of the bearish territory and only at 0.7080 and 0.7120 levels might there be any conviction in a reversal.