NZD/USD dips to 0.7235 amid broader USD strength

Haresh Menghani FXStreet

Having posted a session high at 0.7265, the NZD/USD pair started drifting lower and turned back into negative territory to currently trade at fresh session low around 0.7230 region.

On Monday, the pair managed to early Asian session losses and extended its recovery to 0.7264 despite of in-line with expected release of core PCE price index, Fed preferred inflation gauge, which supported the view of an imminent Fed rate-hike action in 2016.

Earlier on Tuesday, the pair rose marginally despite of weaker housing market data released from New-Zealand that showed a sharp drop in the number of new building approvals issued during the month of July.

GMT	Event	Vol.	Actual	Consensus	Previous
Monday, Aug 29
22:45	NZD Building Permits s.a. (MoM)		-10.5%		21.9% Revised from 16.3%

However, the greenback remained well bid as investors now turn their attention to this week's key event risk, US monthly jobs report, which would assist investors to evaluate the possibilities of a Fed rate-hike decision in September. In the meantime, Tuesday's release of CB consumer confidence index could provide some impetus for short-term traders.

Technical levels to watch

From current levels, 0.7230-25 area seems to protect immediate downside, which if broken seems to drag the pair below 0.7210 support (weekly low) towards testing 50-day SMA support near 0.7175-73 region. On the flip side, 0.7260-65 zone now seems to have emerged as immediate resistance above which the pair seems to extend its bullish momentum back towards reclaiming 0.7300 handle before aiming towards its next major resistance near 0.7330 level.

1. R3 0.7250
2. R2 0.7243
3. R1 0.7233
PP 0.7226
1. S1 0.7216
2. S2 0.7209
3. S3 0.7198

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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