NZD/USD extends strong up-move further beyond 0.7100 handle

Haresh Menghani FXStreet

The NZD/USD pair attracted some strong buying interest this Thursday and surged through the 0.7100 handle to one-week highs.

Currently trading around 0.7120 level, the pair built on its recovery move from 4-month lows and was being supported by broad based US Dollar weakness.

A sharp slide in the US Treasury bond yields, led by Wednesday's perceived dovish FOMC meeting minutes, drove flows away from the greenback and benefitting higher-yielding currencies - like the Kiwi.

Persistent USD selling bias seems to have prompted traders to lighten aggressive bearish positions, initiated in wake of lingering concerns over the political uncertainty in New-Zealand.

Hence, a follow through up-move, supported by some technical buying on a sustained move beyond the 0.7100 handle, now seems a distinct possibility.

Traders on Thursday will confront the release of PPI figures and weekly jobless claims from the US, which along with Fedspeaks would now be looked upon for some fresh impetus.

Technical levels to watch

A follow through buying interest has the potential to continue lifting the pair back towards 200-day SMA near the 0.7150-60 region, above which the momentum could get extended towards the 0.7200 round figure mark.

On the flip side, any retracement back below the 0.7100 handle now seems to find support near 0.7080 level, which if broken would turn the pair vulnerable to retest multi-month lows support near mid-0.7000s.

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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