NZD/USD sticks to RBNZ-led losses, well below mid-0.6700s

• RBNZ’s plans for unconventional monetary stimulus weighed heavily on the Kiwi. 
• Tempered Fed rate cut bets underpinned the USD and added to the selling bias.

The NZD/USD pair now seems to have entered a bearish consolidation phase and was seen oscillating in a range near the lower end of its daily trading range, below mid-0.6700s.

The pair extended overnight rejection slide from the 0.6900 neighbourhood, or multi-month tops and met with some aggressive supply during the Asian session on Tuesday after the Reserve Bank of New Zealand (RBNZ) said it had done contingency planning for unconventional monetary stimulus.

The pair was further pressurized by a follow-through pickup in the US Dollar demand, which remained supported by tempered market expectations for an aggressive monetary easing by the Fed despite the US President Donald Trump’s latest pressure for immediate rate cuts.

Meanwhile, the intraday downtick seemed rather unaffected by positive trade-related headlines, suggesting that the US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will travel to China next week for negotiations with Vice Premier Liu He.

It would now be interesting to see if the pair can attract any fresh buying at lower levels or the current pullback marks the end of the recent bullish trajectory, setting the stage for a further near-term depreciating move amid absent relevant market moving economic releases from the US.

Technical levels to watch