NZD/USD touches a low of 0.6903 on the day

The kiwi's extended fall today continues into European trading with NZD/USD now on the verge of treading water below 0.6900. The crucial support break at the 76.4/23.6 retracement level @ 0.6936 has seen the pair accelerate towards a test of the figure level now.

If 0.6900 fails to hold, it's a slippery slope for the pair with minor support levels next seen around 0.6850-60 and then it's a move towards 0.6800. The next major support level seen will be the November low @ 0.6781.

Against the dollar, the kiwi is down by more than 1.1% on the day now. It's a rough one for the kiwi but the move today is arguably right considering the RBNZ's remarks that a rate cut moving forward is a "valid" option. Prior to this, pretty much everyone would have thought the RBNZ will only have one direction to move rates - and even though I believe that majority of the market still believes so, there is that added element of uncertainty.

And the market is never a big fan of that.