NZD/USD hit one-week low of 0.6983

NZD/USD breached the key psychological support of 0.70 and fell to a one-week low of 0.6983 levels as the American Dollar strengthened following Mnuchin’s comments on tax reforms.

NZD drops despite strong inflation data

New Zealand CPI released yesterday was well above estimates and also met the RBNZ’s 2% inflation target for the first time after five years.  Despite this, the NZD/USD faded the spike to 0.7052 and extended losses to 0.6983 levels today.

Moreover, USD picked up a bid following US Treasury Secretary Mnuchin’s interview with Bloomberg, during which he said the tax reforms are on the way. Nevertheless, the NZD could turn out to be an outperformer, especially if the USD selling gathers pace again, given the strong NZ inflation, rebound in dairy prices.

NZD/USD Technical Levels

The daily RSI has just dipped below 50.00 (bearish below 50.00), suggesting a potential for a sell-off 0.6921 (Apr 10 low) and 0.6890 (Mar 9 low). On the higher side, a daily close above the immediate resistance of 0.7053 (Apr 19 high) would open up upside towards 0.7090 (Mar 21 high) and 0.7130 (Feb 21 low).