NZD/USD headed to 0.6920 immeadiate target?

• NZD/USD meets resistance in the absence of further dollar weakness.
• US tax plan was the driver, but RBNZ official's comments are bearish for the bird.

NZD/USD has fallen away from the highs made on the back of US Senator Bill Cassidy, a Republican from Louisiana, who confirmed that the Senate Republicans had planned to propose delaying a cut in the corporate tax rate from 35 percent to 20 percent until 2019.

• Senate tax bill to delay corporate tax cut until 2019, dollar to deflate?
• Kiwi dips after NZ fin min says changes to RBNZ mandate could mean looser policy

However, the Kiwi eventually dropped from 0.6980 to 0.6934 as the day's underperformer and despite the air of hawkishness from the RBNZ when 2019 inflation expectations picked up in their forecasts. Currently, NZD/USD is trading at 0.6943, down -0.15% on the day, having posted a daily high at 0.6956 and low at 0.6936. Secondly, Kiwi dipped after NZ fin min said changes to RBNZ mandate could mean looser policy. 

Kiwi data just in:

• New Zealand Electronic Card Retail Sales (MoM) registered at 0.3%, below expectations (0.6%) in October.
• New Zealand Electronic Card Retail Sales (YoY): 1.2% (October) vs previous 2.9%.

NZD/USD ears taking back control in absence of further dollar weakness

Meanwhile, analysts at Westpac noted that the bird was creeping higher, with an immediate target 0.7010 (50% retracement), helped by yesterday’s RBNZ MPS, but argues that it needs further USD declines to sustain the move.

NZD/USD 1-3 month:  

"If the RBNZ remains firmly on hold, as we expect, and the US dollar rises on the delivery of a Fed interest rate rise in December, then NZD/USD should fall to 0.67 by year-end," the analysts at Westpac argued. 

NZD/USD levels

NZD/USD seems to be bowing out graciously below the 21 hourly SMA at 0.6956 and looking for an invite from the bears below the 50 hourly SMA at 0.6937 as bullish commitments wane. To the downside, immediate support is seen at 0.6920 (uptrend line); a break lower would weaken the kiwi exposing 0.6900 and then 0.6880 (Oct 30 high).