NZD/USD trims tepid recovery gains, hangs closer to yearly lows
|The NZD/USD pair trimmed some of its tepid recovery gains and retreated around 20-pips from session high to currently trade around the 0.6900 handle.
The latest leg of retracement lacked any fundamental drivers and could be solely attributed to a fresh wave of risk-aversion trade, which tends to weigh on riskier / higher-yielding currencies - like the Kiwi.
• NZ: Wage inflation remains low despite rising consumer prices - Westpac
Despite of the pull-back, the pair has managed to hold with marginal gains amid broad based US Dollar weakness led by disappointment from the US President Donald Trump's tax reform plan and NAFTA news.
• US: Market displays scepticism about Trump’s policy announcements - AmpGFX
Meanwhile, a jump in the Chinese industrial profits, showing a growth of 23.8% y-o-y in March, also extended some support and helped the pair to hold marginally above yearly lows touched in the previous session.
Focus now shift to the US economic docket, featuring the release of durable goods orders, goods trade balance, weekly jobless claims and pending home sales data.
Technical levels to watch
A follow through retracement back below 0.6885 level is likely to get extended towards 0.6860 area (Dec. 23 low), below which the pair is likely to head towards testing the 0.6800 handle.
On the flip side, sustained recovery move beyond 0.6920 level (session tops) seems to confront strong hurdle near mid-0.6900s, which if conquered might trigger a short-covering rally towards the key 0.70 psychological mark.
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