NZD/USD slide continues despite oversold readings

• Kiwi hits fresh 5-month low, eyes break below 0.69.
• The 14-day relative strength index (RSI) shows oversold conditions.

The NZD/USD continues to slide, now trading at 0.6914 - the lowest level since Dec. 12, courtesy of the dovish RBNZ and the falling NZ-US yield spread.

The oversold conditions as the shown by the 14-day RSI are failing to put a floor under the Kiwi. Note, the hourly and the 4-hour RSI also shows oversold conditions. Further, the uptick in the Chinese producer price index has not been able to help the Kiwi either.

That said, a corrective rally could be seen if the US consumer price index, due for release at 12:30 GMT prints below estimates. The cost of living as represented by the CPI is seen rising 0.3 percent month-on-month in April following a 0.1 percent drop seen in March.

NZD/USD Technical Levels

A break below 0.69 (psychological support) would open up downside towards 0.6822 (Dec. 8 low) and 0.6818 (Oct. 27 low). On the other hand, a break above 0.6949 (resistance in 1-hour chart) would allow re-test of 0.6978 (50-hour moving average) and 0.6997 (resistance in 1-hour chart).