NZD/USD found takers around the falling trend line (drawn from Sep 8 high and Sep 22 high) and is now trading on the front foot around 0.7140 levels.
Technical correction underway
The recovery from today’s session low of 0.7109 appears to be a chart driven move, given the spot suffered three-day losing streak. Moroever, the Fed rate hike probability as shown by CME data shows December rate hike bets remain above 70%.
Furthermore, New Zealand government bond yields are trading flat as well. Thus, fundamental factors have not really tilted in favor the Kiwi, forcing us to consider the possibility that chart driven factors are at play here.
Later in the day, the spot remains at the mercy of the overall demand for the US dollars. In US session, consumer confidence number and regional manufacturing indices could influence the pair.
NZD/USD Technical Levels
A break above 0.7148 (Oct 5 low) would open doors for 0.7174 (monthly classic pivot S1). A violation there would expose psychological resistance of 0.72. On the lower side, brech of 0.71 (zero figure) would shift risk in favor of a drop to 0.7077 (Oct 17 low) and 0.7034 (Oct 13 low).
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