The NZD/USD pair fell to a fresh 10-month low at 0.6847 during the first half of the American session as the US Dollar strengthened against its competitors with the US Dollar Index rising to a daily high at 99.20. However, as the investors started to take profits off the table ahead of the macro data from New Zealand, NZD/USD retraced some of its losses. As of writing, the pair was trading at 0.6873, down 0.25% on the day.
Although the US Dollar Index hasn’t been able to make a steady recovery after falling sharply at the start of the week, the NZD/USD remained under a consistent selling pressure and lost nearly 200 pips since Monday. Analysts at Westpac suggest that the Trump administration’s increasingly trade protectionist stance is hurting commodity currencies.
The pair took advantage of the DXY‘s retreat towards 99 area in the last few hours but this recent recovery is seen as nothing but technical. Building permits and trade balance figures will be released from New Zealand during the early hours of the Asian session. If the numbers miss the expectations, markets could see that as an excuse to sell more NZD’s and push the pair to a new 2017 low.
With a break below 0.6845 (10-month/daily low), the pair could target 0.6800 (psychological level) ahead of 0.6705 (May. 31 low). On the flip side, the immediate resistance aligns at 0.6880 (100-WMA) ahead of 0.6950 (Apr. 26 high) and 0.7000 (psychological level).