FxWirePro: NZD/USD gains modestly, but bearish bias remains intact

• NZD/USD  edged higher   on Wednesday but recovery remains fragile  as less hawkish RBNZ rate outlook is likely to keep kiwi dollar under pressure.

•A recent surge in oil prices has heightened upside risks to inflation, prompting markets to increase expectations of another rate hike in October.

• New Zealand business confidence eased in September as volatile oil prices, driven by ongoing conflict in the Middle East, continued to weigh on sentiment, an ANZ Bank survey showed on Wednesday.

•A net 51.9% of respondents expected the economy to improve over the year ahead, down from 53.7% in August, while 47.9% expected their own activity to grow, down from 48.2%.

• Markets are pricing in a 78% probability that the Reserve Bank of New Zealand will raise its policy rate by 25 basis points to 3.0% at its October 28 meeting, with expectations for another increase by February.

•  Immediate resistance is located at 0.5677(Sep 29th high), any close above will push the pair towards 0.5715(38.2%fib).

•  Support is seen at 0.5633(23.6%fib) and break below could take the pair towards 0.5594(Lower BB).

 Recommendation: Good to sell around 0.5680  with stop loss of 0.5760  and target price of 0.5600