NZD/USD Review: Flirts with weekly lows, just above mid-0.6700s ahead of US GDP
| • Extends overnight sharp retracement from over 2-week tops.
• A modest USD buying keeps exerting some downward pressure.
• All eyes remain glued to today’s advance US Q2 GDP growth numbers.
The NZD/USD pair extended overnight retracement slide from over two-week tops and dropped to fresh weekly low on Friday.
Despite Thursday's disappointing US macro data, the USD staged a solid rebound on the back of a goodish pickup in the US Treasury bond yields and prompted some aggressive selling around the major.
The pair kept losing ground for the second consecutive session on Friday and was being weighed down by a follow-through US Dollar buying interest, despite subdued action in the money markets.
Meanwhile, a negative tone around commodity space further dented sentiment surrounding commodity-linked currencies - like the Kiwi and exerted some additional downward pressure through the mid-European session.
Moving ahead, today's key focus would be on the advance US GDP report, which is anticipated to show a strong economic growth during the second quarter of 2018. Strong growth figures would further cement Fed rate hike prospects and increases prospects for further near-term up-move for the buck.
Technical Analysis
Today's downfall looks driven by technical selling, especially after yesterday's sharp slide back below 20-day SMA support. The pair now seems to have formed a bearish double-top pattern on the short-term chart, albeit the set-up will be complete only once the pair breaks below an ascending trend-line support near the 0.6730-25 region.
Below the mentioned support, the pair is likely to aim back towards retesting monthly/YTD lows, around the 0.6690 region, touched on July 2, before starting a fresh leg of near-term downward trajectory.
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