NZD/USD slides to fresh session lows, 0.7000 mark back in sight

NZD/USD witnessed some selling on Thursday and snapped two days of the winning streak.
Prospects for an early Fed tapering underpinned the USD and exerted pressure on the pair.
Sliding US bond yields might cap gains for the greenback and help limit losses for the major.

Haresh Menghani FXStreet

The NZD/USD pair edged lower heading into the European session and dropped to fresh daily lows, around the 0.7020 region in the last hour.

The pair struggled to capitalize on its weekly gains recorded over the past two trading sessions and met with some fresh supply on Thursday amid a modest US dollar uptick. The fact that Fed officials have started to guide the market towards early tapering and higher interest rates as soon as 2022 helped limit the post-CPI USD profit-taking. This, along with a generally softer tone around the equity markets, further collaborated to drive flows away from the perceived riskier kiwi.

Kansas City Fed President Esther George said on Wednesday that the time had come to end the central bank’s bond-buying program. Adding to this, Dallas Fed President Rob Kaplan said that he will press his colleagues to announce a plan to taper bond purchases at the next meeting in late September. This comes on the back of hawkish comments by Atlanta Fed President Raphael Bostic and Boston Fed President Eric Rosengren earlier this week, which continued acting as a tailwind for the greenback.

That said, some follow-through decline in the US Treasury bond yields might hold the USD bulls from placing any aggressive bets and lend some support to the NZD/USD pair. This, in turn, warrants some caution for bearish traders and positioning for any further depreciating move. Market participants now look forward to the US economic docket, featuring the releases of the Producer Price Index (PPI) and Initial Weekly Jobless Claims. Apart from this, the US bond yields and the market risk sentiment might influence the USD price dynamics, producing some trading opportunities around the major.

Technical levels to watch

NZD/USD

Overview
Today last price	0.7021
Today Daily Change	-0.0020
Today Daily Change %	-0.28
Today daily open	0.7041

Trends
Daily SMA20	0.6989
Daily SMA50	0.703
Daily SMA100	0.7095
Daily SMA200	0.7108

Levels
Previous Daily High	0.7063
Previous Daily Low	0.6991
Previous Weekly High	0.7089
Previous Weekly Low	0.6952
Previous Monthly High	0.7106
Previous Monthly Low	0.6881
Daily Fibonacci 38.2%	0.7036
Daily Fibonacci 61.8%	0.7019
Daily Pivot Point S1	0.7001
Daily Pivot Point S2	0.696
Daily Pivot Point S3	0.6929
Daily Pivot Point R1	0.7072
Daily Pivot Point R2	0.7104
Daily Pivot Point R3	0.7144

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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