NZD/USD sinks to low near 0.7080 level
|The NZD/USD pair faded a spike to the highest level since December 14 and retreated back below 0.7100 handle.
Currently hovering around the very important 200-day SMA near 0.7080 region, the pair snapped its recent upward trajectory and ran through fresh offers near 100-day SMA resistance as investors seemed to trim some bearish USD bets ahead of the President-elect Donald Trump's inauguration on Friday. In fact, the key US Dollar Index is holding with gains of 0.5% around 101.70 region and has been the key factor collaborating to the pair's retracement from multi-week highs.
Meanwhile, a mildly positive sentiment around commodity space was seen lending some support to the commodity-linked currencies, including the Kiwi. However, it remains to be seen if the pair is able to defend 50-day SMA session near 0.7065 region or the long-unwinding pressure would continue to drag the pair ahead of this week's macro releases, including the NZ GDT price index, US CPI and important Chinese macro data.
Technical levels to watch
A follow through selling pressure below 50-day SMA support near 0.7065 region is likely to accelerate the slide towards 0.7020 support area, en-route 0.70 psychological mark and 0.6985 support. On the upside, recovery back above 0.7100 handle might now confront resistance near 0.7125 level. Momentum above 0.7125 resistance could get extended but might continue to be capped at 100-day SMA hurdle near 0.7150 region.
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