The NZD/USD pair held on to disappointing data-led weakness and extended its slide further below 0.7200 handle.
Currently trading around 0.7190 level, testing session lows, the pair came under some renewed selling pressure in wake of a drop in the business PMI and lower-than-expected retail sales growth. The PMI for January came-in at 51.6, well below 54.2 reported in December, while retail sales rose 0.8% in Q4 2016 and was well below the 1.1% gain expected.
Against the backdrop of yesterday's rejection from weekly high near 0.7240 level, today’s weaker macro data triggered additional long-unwinding pressure and collaborated to the pair's slide back below 0.7200 handle.
Meanwhile, a mild greenback recovery, amid rebounding US treasury bond yields, further drove flows away from the higher-yielding currencies – like the Kiwi. With today’s downslide, the pair has now reversed all of its weekly gains and remains at the mercy of US Dollar price dynamics.
Technical levels to watch
Immediate support on the downside is pegged near 0.7165 horizontal level below which the pair is likely to head towards 100-day SMA strong support near 0.7140-35 region. On the upside, momentum back above 0.7200 handle might now confront resistance near 0.7220-25 zone, which if cleared might now lift the pair beyond weekly high resistance near 0.7240 level towards testing its next resistance near 0.7275 horizontal zone.
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