NZD/USD Fall 0.40%, Holds Just Above 0.6200

NZD/USD fell by 0.47% to close at 0.6204, in what was a quiet session with the UK out. Equities were lower overnight which did high beta FX, the weakness in equities was largely focused on tech stocks ahead of Nvidia earnings which are due to be released on Thursday.

• The NZD/USD is testing crucial support levels of 0.6200 after reaching highs above 0.6230. The MACD indicator shows flat green bars, indicating the rally may be ending and consolidation could continue in the short term. The RSI has moved away from overbought conditions and is now at 65 suggesting growing selling pressure.
• Initial support is now 0.6200 with a break here potentially causing further weakness and a resumption of the yearly rangebound trading, if we do fall back below, 0.6060-6070 (50, 100 & 200-Day EMA) will be the support zone. Initial resistance is 0.6237 (Aug 23 highs) above here 0.6251 (Jan 15 highs) and 0.6285 (Jan 4 highs) become targets.
• RBNZ dated OIS is pricing is little changed this morning October with 33bps of cuts, while the November meeting is pricing 76bps of cuts.
• The NZ-US 2yr swap spread was 2bps lower on Monday and now trades at 4.5bps
• Expiries: 0.6000 ($1.02b) & 0.5800 ($1.02b) Aug 27th NY cut
• Today, the data calendar is empty, New Zealand will look to sell 70, 168 & 364-day bills.