Sliding Still

The Doji candlestick charted on Tuesday represented just a short breather before the resumption of losses in AUD/NZD and the re-pricing of RBNZ easing bets has driven the subsequent downswing. The rate sank through its 200-DMA & Oct 30 low of NZ$1.0595 in the wake of Wednesday's MPS and continued to lose altitude today, dipping past Jul 10 low of NZ$1.0566 to levels not seen since Apr 22.

• Today's move has been driven by a BBG interview with RBNZ Asst Gov Hawkesby, reaffirming and building on yesterday's MPS. Hawkesby noted that the deployment of negative interest rates will be less likely if banks make use of the new FLP facility and said that the Bank thinks that "less stimulus is required than we thought in August". Interestingly, Hawkesby attributed yesterday's market reaction to the revisions of sell-side calls rather than the RBNZ decision itself. Hawkesby will speak again this evening.
• AUD/NZD has trimmed losses after rejecting a short-term descending channel floor earlier in the session. It last sits at NZ$1.0568, just a handful of pips lower on the day. A break below the aforementioned channel floor at NZ$1.0544 would shift focus to the mid-point of the YtD range at NZ$1.0520 & longer-term channel floor/Apr 21 low of NZ$1.0489/84. Conversely, bulls need a return above the 200-DMA at NZ$1.0648 to get some reprieve before targeting key resistance at NZ$1.0767, which capped gains on Nov 5 & 6.
• Worth keeping an eye on the RSI. The index has not yet entered oversold territory, suggesting scope for an even deeper sell-off. On the other hand, should the index cross above the previous peak, resultant failure swing would support the bullish case.