NZD/USD off lows, still in the red below 0.7000 mark

The NZD/USD pair maintained its offered through the early European session and was last seen hovering around the 0.6975-70 region, or the lowest level since early April.

The pair prolonged its recent bearish trajectory and continued losing ground for the fourth straight session on Friday. This also marked the fifth day of a negative move in the previous six and sponsored by the prevalent strong bullish sentiment surrounding the US dollar.

In fact, the key USD Index shot to more than two-month tops and remained well supported by the Fed's sudden hawkish turn. It is worth recalling that the Fed stunned investors on Wednesday and brought forward its projections for the first post-pandemic interest rate hikes.

The so-called dot plot pointed to two rate hikes by the end of 2023 as against March's projection for no increase until 2024. This, to a larger extent, helped offset the overnight sharp pullback in the US Treasury bond yields and mostly disappointing US macro data.

Apart from this, Friday's downfall could further be attributed to some technical selling below the very important 200-day SMA. A subsequent breakthrough the key 0.7000 psychological mark might have already set the stage for an extension of the ongoing depreciating move.

That said, extremely oversold conditions on intraday charts warrant some caution for bearish traders. Hence, it will be prudent to wait for some near-term consolidation or a modest bounce before positioning for a further decline amid absent relevant market moving economic releases.

Technical levels to watch