NZD/USD hammered down below 0.6800 handle, lowest since early June 2016
| • Prints fresh yearly lows, below the 0.6800 handle despite USD weakness.
• Renewed pickup in the US bond yields aggravates selling pressure.
The NZD/USD pair came under intense selling pressure and was hammered down to fresh yearly tops during the early European session on Friday.
After an initial uptick to 0.6883, the pair came under intense selling pressure and took along some stops placed at the 0.6800 handle. The pair extended last week's rejection slide from just ahead of the key 0.70 psychological mark and dropped to its lowest level since early June 2016.
The latest leg of sharp downslide over the past hour or so lacked any obvious catalyst and could be attributed to a modest pickup in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Aussie.
Even the prevalent selling bias surrounding the US Dollar did little to lend any support and stall the pair's near-term downward trajectory to an intraday low near the 0.6785 region.
Meanwhile, the technical picture now seems to suggest a fresh bearish break and hence, a follow-through weakness, led by some additional long-unwinding pressure, now seems a distinct possibility.
Later during the NA session, the US housing market data - housing starts and building permits, would now be looked upon for some fresh impetus.
Technical levels to watch
Immediate support is now seen near the 0.6765 horizontal level, below which the downward trajectory could further get extended towards the 0.6700 handle. On the upside, any recovery attempts back above the 0.6800 handle might now confront fresh supply near the 0.6820 region and any subsequent up-move could be capped near the 0.6875-80 supply zone.
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