FxWirePro: NZD/USD erases dovish RBNZ-led losses, holds support at 50-DMA

NZD/USD chart - Trading View 

NZD/USD pared dovish RBNZ-led losses and edged higher from session lows at 0.7000. 

The major was trading 0.06% higher at 0.7025 at around 05:40 GMT, after hitting session lows at 0.70.

New Zealand dollar dented after the Reserve Bank of New Zealand (RBNZ) dampened expectations for bigger rate hike.

Comments by Assistant Governor Christian Hawkesby indicated the RBNZ was likely to take a more cautious approach when it meets next month.

The central bank delayed raising rates last month and is widely expected to raise interest rates by at least 0.25% at its next monetary policy meeting on Oct. 6.

However, some analysts had expected a 0.5% hike due to the tight labour market, rising housing prices and red-hot economy.

NZD/USD refreshed monthly lows, but later reversed losses as fears of a wider contagion from the debt crunch at Chinese property developer Evergrande subsided.

Technicals support downside. The pair is currently holding support at 50-DMA and cloud base, break below will drag the pair lower.

Next major support is seen at 55-week EMA at 0.6972. On the flipside, bounce off 50-DMA and retrace above daily cloud will negate any downside bias.