NZD/USD: 0.6950 on the cards? Bears well in control now below key ma's

NZD/USD is rising from the lows of 0.7009, but lacks conviction due to the heavy slide from 0.7324 levels.

The bird fell to to 0.7009 being a one-month low with a strong US dollar all around while the GDT dairy auction was a nonevent without much of a change although the world milk powder was up 1.9%, making for little impact on the NZD though.  

"Our underlying constructive outlook for the US dollar remains intact.," explained analyst at Brown Brothers Harriman. "It is broadly based on the divergence between the US and most other major economies.  The US acted early and aggressively to counter the Great Financial Crisis. Unorthodox policies, such as quantitative easing,  were adopted years before the ECB and BOJ. This has produced different outcomes.  US economic growth may not be impressive by pre-crisis standards, but it does not seem particularly fragile."

NZD/USD levels

Recovering from one month lows, it was yesterday's RBNZ announcement that fueled the decline in the bird further when markets backed the offer based on the Banks  LVR restrictions, adding further to the case for an 1 August OCR cut. We target sub-0.7000 during the days ahead. 

Analysts at Westpac offered a 1-3 month NZD/USD outlook:  "The uncertainty generated by Brexit plus further RBNZ easing should be negative for the NZD. We target 0.67." 

For the mean time, price is firmly offered below the 200 sma on the 4hr sticks at 0.7114, en-route for 0.6997 and the 50 dma. The price is also below the double top of April's and May's business around 0.7050. Further bearish moves will dig a hole on the birds nest even wider, opening up 0.6950.