• NZD/USD dipped to hit fresh six month low on Tuesday as weak consumer spending data reinforced expectations for additional policy stimulus.
• New Zealand data showed electronic card spending dropped 0.5% in September, contrary to analysts’ expectations of a modest increase, indicating that consumers have yet to respond to the Reserve Bank of New Zealand’s series of rate cuts.
• The soft retail and electronic card sales for September suggested that consumer demand is slowing, which could weigh on economic growth.
• The RNBZ underlined its intent on Tuesday by loosening restrictions on home lending, likely hoping to support a very subdued housing market.
•Markets imply around an 85% probability of a rate cut to 2.25% in November, and some chance of reaching 2.0%
• Immediate resistance is located at 0.5761(Oct 10th high), any close above will push the pair towards 0.5806(50%fib).
• Support is seen at 0.5683(38.2%fib) and break below could take the pair towards 0.5654(Lower BB).
Recommendation: Good to sell around 0.5700 with stop loss of 0.5750 and target price of 0.5630


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