NZD/USD jumps to near 2-month tops, around 0.7030

Haresh Menghani FXStreet

• NZ FinMin’s comments help recover previous session’s slide.
• Renewed US tax bill uncertainty weigh on USD and provides an additional boost.
• Second-tier US economic data eyed for trading opportunities.

The NZD/USD pair gained some fresh traction on Friday and has now jumped back to post-FOMC tops near the 0.7025-30 region.

Today's strong up-move was primarily led by NZ Finance Minister Grant Robertson's comments, saying that he was comfortable with the general trend of the New Zealand dollar.

Meanwhile, investors looked past yesterday's upbeat US economic data, with some renewed tax-bill uncertainty weighing on the US Dollar and driving the pair back closer to near two-month tops.

It, however, remains to be seen if bulls are able to maintain their dominant position or the up-move runs out of steam at higher levels amid a goodish pickup in the US Treasury bond yields, which tends to weigh on higher-yielding currencies - like the Kiwi.

On the economic data front, the release of Empire State Manufacturing Index, Industrial Production and Capacity Utilization Rate from the US would now be looked upon for some short-term trading impetus on the last trading day of the week.

Technical levels to watch

A follow-through buying interest has the potential to continue lifting the pair towards 0.7060 horizontal hurdle en-route an important moving averages confluence hurdle near the 0.7100 handle.

On the flip side, any retracement back below the 0.70 handle might continue to find support near the 0.6980 level, which if broken could drag the pair back towards 50-day SMA support near the 0.6935 region.

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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