The NZD/USD pair remained under intense selling pressure on Tuesday and has now dropped to near two-week lows near 0.6950 region.
Spot extended previous session’s rejection move from the 50-day SMA immediate strong hurdle near mid-0.7000s amid surging US treasury bond yields, which tends to drive flows away from higher-yielding currencies – like the Kiwi.
In absence of any fresh fundamental driver, the pair’s latest leg of sharp downslide in the past hour or so could also be attributed to some stops being triggered on a decisive break below 0.6980 important horizontal support amid subdued price action surrounding the key US Dollar Index.
Failure to clear an important hurdle, and a subsequent break below immediate support, now seems to have confirmed a bearish break-down. Hence, a follow through selling pressure and resumption of the previous depreciating move still remains a distinct possibility.
Traders now look forward to the US economic docket, featuring the release of House Price Index, Consumer Confidence Index and New Home Sales data for some fresh trading impetus.
Technical levels to watch
On a sustained weakness below mid-0.6900s is likely to get extended towards 0.6920-15 intermediate support ahead of March monthly lows support near 0.6900-0.6890 zone.
Meanwhile, any recovery move beyond 0.6975 level now seems to confront a strong resistance near the key 0.70 psychological mark, which if cleared might trigger a short-covering rally back towards 50-day SMA important hurdle near mid-0.7000s.