NZD/USD erodes 40-pips rapidly, refreshes lows near 0.6840
|- Fails to benefit from broad USD weakness.
- Poor NZ data, risk-off weigh.
- Focus on the US Senate tax vote.
The NZD/USD pair experienced two-way price action in Asia, initially having knocked-off to 0.6845 levels on the back of downbeat NZ macro news, before staging a solid rebound to 0.6885 region on resurgent USD supply.
The US dollar got broadly hammered on the WSJ reports of that Special counsel Robert Mueller’s investigators have issued a subpoena to Trump’s election campaign for documents related to Russia.
However, the spot failed to sustain at higher levels and dropped back below the midpoint of 0.68 handle on a re-emergence of risk-off trades, after the sentiment soured on the back of fresh North Korea headlines, citing that the North is aggressively working on a ballistic missile submarine.
Moreover, a negative surprise seen in the NZ PPI report combined with deteriorating business manufacturing sector activity also remains a drag on the prices. In the day ahead, the risk-off market profile will continue to drive the sentiment behind the major, as investors gear up for the US housing data set.
NZD/USD Levels to consider
The NZD breaks below 0.6850/45 (psychological levels/ Nov 14 low), below which 0.6818 (multi-month lows) and 0.6800 (key support) are key near-term downside areas. To the topside, a test of 0.6895/0.6902 (20 & 10-DMA) due on the cards, which could open doors towards 0.6919 (Nov 15 high).
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