FxWirePro: NZD/USD hits fresh six-month low, scope for further downside

• 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