NZD/USD struggles to break through 0.73 handle

Haresh Menghani FXStreet

• A modest USD weakness helps regain traction.
• Mixed Chinese data fails to lend additional support.
• US data eyed for fresh trading impetus.

The NZD/USD pair traded with a mild positive bias for the second consecutive session but continued with its struggle to sustain above the 0.7300 mark.

The pair did move past the mentioned handle on Wednesday and refreshed 4-month tops but witnessed a sharp reversal during the NY trading session. The Fed's Beige Book reaffirmed that the central bank was still on track for three rate hikes in 2018 and drove flows away from higher-yielding currencies - like the Kiwi.

Some renewed US Dollar weakness did assist the pair to regain some traction on Thursday but the up-move lacked strong conviction and was capped by mixed Chinese macro data. A slightly better-than-expected Chinese fourth-quarter GDP print was largely offset by a big miss on retail sales data and did little to provide any fresh bullish impetus.

It would now be interesting to see if the 0.7300 handle continues to keep a lid on the pair or bulls are able to regain control as traders look forward to the US economic data from some fresh impetus.

Today's US economic docket features housing market data, which along with Philly Fed Manufacturing Index and the usual weekly initial jobless claims data might provide some short-term trading opportunities ahead of Friday's release of Business NZ Manufacturing Index.

Technical levels to watch

Immediate support is pegged near the 0.7245-35 region, below which the corrective slide could get extended towards the 0.7200 handle en-route 0.7155-50 strong horizontal support.

On the upside, a sustained move above the 0.7300 handle might continue to confront fresh supply near the 0.7330 region, which is followed by a strong resistance near mid-0.7300s.

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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