NZD/USD downside favoured towards 0.6950

NZD/USD is currently in a sideways drift with resistance at 0.7180 capping the uptrend from 0.7109.

The bird has been on the back foot as markets start to look at the RBNZ as the next most likely candidate in the race to zero rates to cut rates again before the year is out while the RBA can hold off for the time being given the CPI data that beat expectations on the headline. The dollar is firm in general, soft overnight though, but with the Fed tipped to hike rates in December and a Clinton victory on the cards, NZD/USD is suffering in the wake of a resurgence in the greenback. The bird was a little soft on the miss in exports in the trade balance. Exports were $3.47bn, expected $3.53bn while prior was $3.39bn

NZD/USD levels

Analysts at Westpac offered NZD/USD in a 1-3 month outlook:  Targets 0.6950 or lower as long as the RBNZ cuts to 1.75% in November and the Fed tightens to 0.625% in December, as we expect. Meanwhile, the 200 dma at 0.7044 is a compelling downside target for the interim and recoveries above 0.7265 and 19th October highs will otherwise leave the bird exposed to the downside still.