NZD/USD plummets to lows, around mid-0.7300s

Haresh Menghani FXStreet

• USD demand picks-up pace during the early NA session.
• Long-unwinding trade adds to the downward pressure.

The NZD/USD pair extended its retracement slide from the 0.7400-0.7410 supply zone and tumbled to 3-day lows, around the 0.7360-50 region in the last minute.

The pair continued with its struggle to build on its up-move beyond the 0.7400 handle and was now being down a follow-through USD demand, which seems to have picked-up pace during the early NA session.

In fact, the key US Dollar Index finally broke out of its European session consolidation phase and was now seen building on Friday's goodish rebound from over 3-year lows, which seems to be the only factor behind the pair's sharp fall of around 40-50 pips over the past couple of hour.

Today's downfall could also be attributed to some long-unwinding pressure, especially after the pair's repeated failure to sustain/build on its move beyond the 0.7400 handle. Hence, a subsequent weakness, amid holiday-thinned liquidity conditions, now looks a distinct possibility.

Moving ahead, this week's important releases, including the latest FOMC meeting minutes and NZ quarterly retail sales data, would now be looked upon for some fresh directional impetus.

Technical levels to watch

A follow-through selling pressure below 0.7340 level is likely to accelerate the fall back towards the 0.7300 handle en-route 0.7280-75 support area. On the upside, the 0.7400 handle now becomes an immediate strong hurdle, which if cleared decisively might trigger a short-covering rally towards reclaiming the key 0.75 psychological mark.

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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