NZD/USD jumps to near five week tops, around mid-0.6900s
| • Moves above 50-DMA for the first time since Oct. 19.
• Softer USD/bond yields help build on overnight strong gains.
• US PPI print to provide some impetus ahead of Wednesday’s key event risk.
The NZD/USD pair continued gaining positive traction for the third consecutive session and jumped to over 4-week tops during the early European session on Tuesday.
A modest US Dollar retracement, backed by a subdued US Treasury bond yields helped the pair to build on previous session's strong up-move led by the appointment of Adrian Orr as the next RBNZ chief from March.
The pair rose to mid-0.6900s, its highest level since Nov. 10, and today's up-move could also be attributed to some technical buying, especially after a decisive move beyond 0.6925-30 supply zone.
The pair has now moved above 50-day SMA for the first time since Oct. 19, with a follow through up-move, supported by additional short-covering, now looking a distinct possibility.
On the economic data front, the US PPI print would now be looked upon for some fresh trading impetus later during the NA session. The key focus, however, would remain on Wednesday's US consumer inflation figures, which along with the highly-anticipated FOMC decision would help investors determine the pair's next leg of directional move.
Technical levels to watch
Immediate resistance is now pegged near the 0.6975-80 region (early Nov. highs), above which the pair seems more likely to move past the key 0.70 psychological mark and dart towards its next major hurdle near the 0.7055-60 region.
On the flip side, 0.6925 level now becomes an immediate support to defend, which if broken could drag the pair back below the 0.6900 handle towards 0.6880 horizontal support en-route mid-0.6800s.
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