NZD/USD slumps below 0.70 as DXY continues to push higher

USD becomes the strongest currency of the day.
NZD/USD loses 50 pips to break below 0.70.
Business PMI from New Zealand is next on the docket.

Eren Sengezer FXStreet

The NZD/USD pair lost its traction in the second half of the day and broke below the 0.70 mark as greenback continued to outperform its rivals. As of writing, the pair was trading at 0.6990, losing 0.5% on the day.

Following the European Central Bank's monetary policy announcements and president Mario Draghi's remarks, a fresh selling wave witnessed on the European currencies suggested that investors attention shifted to the USD especially with the Fed looking to make two more rate hikes in the remainder of the year. The US Dollar Index, which tracks the greenback against a basket of six currencies, rallied to its best level since May 30 at 94.60 and was last seen at 94.50, where it was up 1% on the day.

Meanwhile, upbeat retail sales and import/export price index figures from the U.S. provided an additional boost to the buck.

In the early trading hours of the Asian session, the Business NZ is going to publish its PMI data, which is considered to be a good indicator of the overall economic health in New Zealand. However, the USD demand is likely to continue to drive the pair's price action on the last day of the week.

Technical levels to consider

The immediate support for the pair is located at 0.6975 (Jun. 13 low) ahead of 0.6925 (May 9 low) and 0.6850 (May 16 low). On the upside, resistances are located at 0.7000 (psychological level/50-DMA), 0.7060 (Jun. 6 high) and 0.7100 (psychological level/200-DMA).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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