NZD/USD tested 100-DMA support, what’s next?
- Bears eyeing a test of 200-DMA at 1.7150 amid stronger DXY.
- Holiday-thin trading to overshadow the US macro news?
The NZD/USD pair extended its sharp reversal from above the 0.73 handle into a third day today, having hit fresh six-day troughs of 0.7188 on a breach of the key 100-DMA support located at 0.7193 levels.
The ongoing USD buying theme remains the main catalyst behind the Kiwi’s downslide, as month/ quarter-end flows continue to boost the demand for the greenback while easing global trade concerns combined with upbeat US fundamentals also favor the US currency. The USD index is now seen consolidating the recent rebound near 89.70 levels, as the bulls look to regain the 90 handle heading into the Easter weekend.
On the NZD-side of the equation, the losses are likely to be capped, as the higher-yielding currency is expected to benefit from a recovery in oil prices. Further, a jump in the NZ building consents data also continues to underpin the sentiment around the OZ currency. New Zealand’s building consents for February came in at +5.7% m/m versus +0.2% m/m previous.
Looking ahead, the spot will continue to get influenced by the risk trends and USD dynamics ahead of a fresh batch of key US macro releases, including the core PCE price index and consumer sentiment data.
NZD/USD levels to watch
According to Joshua Gibson, Analyst at FXStreet, “… pressure is mounting to drive the NZD back into the 200-day SMA at 0.7150, and a successful push past the key barrier sees the way open for further downside into November's range, beneath the 0.7000 major level. Resistance is piling up on the Kiwi from this week's swing high at the 0.7300 level with further resistance from March's high near 0.7350.”