After refreshing the three-week high at 0.7072, the NZD/USD started to erase its daily gains as the US Dollar Index moved back into the positive area above 101. As of writing the pair is still up 0.30% at 0.7040.
The pair could struggle to find fresh impetus as the NA session won't offer macro data for the rest of the day. The NZ GDT price index, which will take place tomorrow, and the important RBNZ policy rate decision on Wednesday (20:00 GMT) will be watched closely. The latest GDT price index from two weeks ago showed that the whole milk powder prices dropped %12.4 putting pressure on the NZD.
Jason Wong, currency strategist at Bank of New Zealand, thinks that it's unlikely to see much change in the RBNZ’s policy tone and adds that the balance of risk tilted towards the NZD making up a little more ground over coming trading sessions.
The first hurdle for the pair could be found at 0.7072 (Daily high) followed by 0.7160 (200-DMA) and 0.7245 (Feb. 23 high). On the downside, a breach of 0.7000 (psychological level) could open the door for a drop to 0.6965 (10-DMA) and finally 0.6890 (Mar. 10 low).