NZD/USD drop contradicts the uptick in yield spread

NZD/USD fell to 0.7164 this Thursday morning in Asia, the lowest level since June 6. The daily chart shows a bearish head and shoulders reversal and a falling wedge pattern. 

The drop in the bird is largely due to RBNZ Wheeler’s jawboning and the broad based US dollar reversal. 

NZ-US 10-year yield spread

However, the bond yield spread is not supporting the weak trend. The NZ-US 10-yr yield spread has widened to 81 basis points; the highest level since mid-April. 

One-month 25-delta risk reversal

The options market indicates the sentiment is bearish. The 1-month 25-delta risk reversal continues to lose altitude along with the spot. The gauge currently stands at -1.25, the lowest reading since Aug 11.