FxWirePro: NZD/USD recovers from six-month low as selling pressure eases

• NZD/USD recovered from six month low on Thursday after plunging in the prior session after RBNZ surprised markets with an aggressive rate cut

• The Kiwi tumbled on Wednesday after the Reserve Bank of New Zealand slashed the cash rate by a larger-than-expected 50 basis points to 2.6%, signaling the possibility of further easing as it seeks to revive the stalled economy.

• Yields on New Zealand 10-year bonds  fell 12 basis points to 4.145%, their lowest level since September last year and just 3 basis points above U.S. yields.

•Markets are pricing in an 80% probability of another rate cut to 2.25% in November, with a 50-50 chance of rates falling to 2.0% next year.

•  Immediate resistance is located at 0.5840(38.2%fib), any close above will push the pair towards 0.5850(SMA 20).

•  Support is seen at 0.5745(23.6%fib)and break below could take the pair towards 0.5715  (Lower BB).

 Recommendation: Good to buy around 0.5800 with stop loss of 0.5740 and target price of 0.5850