NZD/USD flirting with 50-DMA support
|The NZD/USD pair, once again, managed to rebound from 50-day SMA support but has failed to build on to its recovery momentum and maintained its offered tone.
Currently trading around 0.7235-40 region, the pair came under renewed selling pressure on Monday after New-Zealand trade balance for August missed expectations and came-in at -1265 million, led by an unexpected rise in imports and sharper-than-expected decline in exports. The data provided little incentive for bulls and the pair dropped to monthly lows.
Moreover, rising expectations of further RBNZ interest rate cut at is meeting in November coupled with bearish sentiment surrounding equity markets has failed to extend any support for the kiwi.
Traders now look forward to the release of new home sales data from the US, later during NA trading session, in order to grab some short-term trading opportunities.
Technical levels to watch
A follow through selling pressure below 0.7220 level (session low), the pair is likely to extend its bearish momentum even below 0.7200 handle towards 0.7180-70 strong horizontal support. Meanwhile on the upside, recovery momentum above 0.7250 immediate resistance could get extended beyond 0.7300 handle but is likely to be capped at a strong horizontal resistance near 0.7315-20 area.
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