The New Zealand dollar drifted yesterday after hopes of upward action, and closed flat.
However, its medium-term direction is down, according to BNZ forex manager Greg Ball.
The kiwi finished at 45.18USc.
Mr Ball said the market appeared long just before the close, with people hoping to trigger stop-loss buying around 45.35c, particularlysince the aussie, which usually drives the local unit, was well-bid.
However, some selling of kiwi for aussie took place once again, catching the market long and the unit drifted down.
Overnight Thursday the unit hit a high of 45.50USc on the back of a strong Australian dollar.
Mr Ball expected the kiwi to hold current levels but a break of 45.05c would see it head to 44.80c.
Looking further out, BNZ was advising selling on rallies, picking the kiwi to break downside resistance at 44.60c and head for 43c, where it should find equilibrium.
"We've got a lot of euro kiwi redemptions coming in into September," said Mr Ball.
The focus was now on the US Federal Reserve and whether it raised interest rates on Tuesday, he said.
"Even without a tightening, the US dollar will continue to be strong. People do want to continue to invest over there, so we're not going to see the capital flows into New Zealand."
The aussie ended firmer at 59.35USc. Again the kiwi slipped on the cross, buying 76.12Ac.
