NZD/USD: remains stable on 0.71 handle despite earthquake

NZD/USD has been little affected by the earthquake and is stable in early Asia oscillating around 0.7121.

NZD/USD has been sold off after an initial rally post the RBNZ cutting rates as expected along with a Trump victory that has made the case for a stronger greenback across the board with markets anticipating that the Fed will hike rates more aggressively to battle against pending inflation and government spending under a full Republican party in both the White house and congress. 

Trump in the White House – market implications

Meanwhile, the week starts off with NZ REINZ housing data and services PMI and a batch of Chinese data for October including retail sales and industrial production.

NZD/USD levels

As the uptrend on the daily sticks from late August at 0.6230 comes under threat, NZD/USD trades below the 4hr 200 sma at 0.7195, risks remain to the downside targeting the 200 dma at 0.7078 first on a break of the handle. Analysts at Westpac noted that momentum has flipped to negative and they are targeting 0.7035 next.  "NZD/USD 1-3 month:  Targets 0.6950 or lower as long as the RBNZ cuts to 1.75% in November and the Fed tightens to 0.625% in December, as we expect."