The NZD/USD pair once again faced rejection near 50-day SMA hurdle and is now headed towards the lower end of daily trading range.
Currently trading around 0.7020 level, spot ran through fresh offers near mid-0.7000s and reversed majority of upbeat NZ CPI-led gains to fresh three-week tops. A goodish recovery move in the US treasury bond yields seems to be only factor driving flows away from higher-yielding currencies - like the Kiwi, which otherwise has failed to lend any immediate support to the greenback, with the key US Dollar Index struggling near monthly lows.
Market seems to have digested today's NZ Consumer Price Index (CPI) report that showed prices rose at their fastest annual pace in five- and-a-half years during the first quarter of 2017, with the US bond yields dynamics turning out to be an exclusive driver of the pair's movement during European session.
Next on tap would be the US economic docket that includes - weekly jobless claims and Philly Fed manufacturing index, which would help market participants grab short-term trading opportunities. Later during the NY session, the US Treasury Secretary Steven Mnuchin's speech would be closely scrutinized for comments on the US currency.
Technical levels to watch
On a sustained break below the key 0.70 psychological mark, the pair is likely to accelerate the slide towards 0.6960-55 horizontal support before heading towards its next important support near 0.6910-0.6900 region.
Meanwhile on the upside, 0.7040-50 area (50-day SMA) remains immediate strong resistance, which if conquered could lift the pair towards 100-day SMA hurdle near 0.7080 region. A follow through buying interest should pave way for continuation of the pair's near-term upward trajectory beyond the 0.7100 handle towards testing the very important 200-day SMA near 0.7135-40 region.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.