NZD/USD: bear sn control, 0.66 handle fragile, eyes on 0.6235 on the wide

• NZD/USD fragile on the 0.66 handle and bears can target 0.6235.
• Bulls hop for some short-term relief in the RBA and GDT price index.

NZD/USD has been drifting in a tight range in holiday markets in the US with its recovery capped at 0.6620 from 0.6593 recent lows. Currently, the pair is oscillating at 0.6601 within a 5 pip range in very quiet conditions as traders wait for liquidity to come in from Tokyo and possible action around Aussie data - (nothing on the NZ front until the GDT price index - falling dairy prices, and weaker terms of trade have been a negative input for the bird - bulls keeping fingers crossed for some consolidation in the data). 

The spotlight will be on Australia today, with the latest RBA decision. However,  a significant change in tone is not expected, but the Bank’s take on weak housing market data and higher mortgage rates will be watched. Anything remotely bearish/dovish will light up the green light for the bears again after yesterday's retail sales miss with a target set on the 0.7159s, most likely taking the Kiwi along for the ride. 

Market sentiment grows that RBNZ will cut rates, not hike

Meanwhile, there is growing noise of an OCR cut from the RBNZ. Analysts at ING Bank noted that markets are gaining conviction over the fact that the Reserve bank of New Zealand's next policy move will be a cut - rather than a hike: "Widening rate differentials are likely to continue weighing on NZD crosses over the coming months. If global growth and trade also take a real hit, NZD/USD could find itself closer to 0.60 (as opposed to 0.70) by year-end."

NZD/USD levels

While support is noted down at 0.6590 and resistance up at 0.6640, while below the 21-W SMA and the 21-D SMA, the 0.66 handle is fragile and there is deeper support down at 0.6550. The August 2015 lows at 0.6235 are a key objective. There is plenty of downside to go within the Bollinger bands and RSI. On the flip side, above the 21-D SMA at 0.6650, the weekly 10 SMA is still the first key target to the upside - located around 0.6710 and if broken, it will be the first time the price has traded above it since mid-April earlier this year. While otherwise, the bull's target in the medium term should be the 200-month moving average resistance at 0.7019.