NZD/USD headed to 0.7170 support amid notable USD demand

Dhwani Mehta FXStreet

The NZD/USD pair set off a fresh week on a weaker note, as the US dollar takes a major lead across its main competitors ahead of a Big week.

NZD/USD eyes US ISM, NZ GDT price index

The Kiwi breaks its last week range trade to the downside, now accelerating the declines towards the next key support located near 0.7170, as the bid tone around the US dollar keeps growing bigger across the board on the back of aggressive EUR/USD selling, with markets reacting to the latest developments regarding the vote in the Catalan region of Spain.

Moreover, the latest mixed Chinese manufacturing PMI reports released by Caixin and Markit also weighs down on the spot, while thin liquidity amid Chinese holidays all this week, also adds to the renewed downside seen in the NZD/USD pair.

Meanwhile, the higher-yielding NZD also remains negatively affected by subdued oil prices and mixed Asian equities, as focus now shifts towards the US ISM manufacturing PMI release for fresh impetus amid holiday-thinned markets.

Also, the pair eagerly looks forward to the key updates on the NZ election as well as the NZ GDT price index due on the cards tomorrow for the next direction.

NZD/USD Levels to consider

NZD/USD tested 5-DMA/ daily pivot at 0.7211/14, with 0.7168/67 (Sept 28 & 26 low) still guarding 0.7157 (200-DMA) and a break back below 0.7100 (round number) are key near-term downside areas. To the topside, a test of 0.7246 (10-DMA) due on the cards, which could open doors towards 0.7300 (Aug 29 high).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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