Having faced rejection at 100-day SMA hurdle, the NZD/USD pair snapped four days of winning streak and traded with negative bias through early NA session.
The pair shrugged off upbeat NZ budget presented by the NZ Finance Minister Steve Joyce and remained under some selling pressure through early NA session on Thursday.
The pair’s inability to break through an important hurdle, for the second consecutive day, seems to have prompted traders to take some profits off their bullish positions, especially after the pair had rallied nearly 250-pips over the past couple of weeks.
Adding to this, a modest greenback recovery, with the key US Dollar Index bouncing off multi-month lows, further collaborated to the pair’s retracement from nearly two-month highs.
The downslide, however, remained limited amid continuous slide in the US treasury bond yields, primarily led by now so hawkish FOMC meeting minutes, which was seen lending some support to the higher-yielding currencies – like the Kiwi. The pair has now bounced off around 20-pips from session low and was last seen trading around 0.7035 region.
Technical levels to watch
On the upside, 100-day SMA near 0.7055 region remains immediate strong hurdle, which if conquered is likely to accelerate the up-move further towards 0.7090 intermediate resistance ahead of the very important 200-day SMA barrier near 0.7110-15 region. On the flip side, 0.7015-10 area now seems to act as immediate support, which if broken could accelerate the slide towards 0.6940-35 horizontal level with some intermediate support near 0.6970-65 region.