NZD/USD heads for lowest close in two months

• Kiwi extends losses versus US dollar over the American session.  
• NZD/USD breaks 3-day range to the downside.  

After a short-lived recovery, the Kiwi resumed the decline against the US dollar, falling to the lowest level since early November. The NZD/USD pair is about to post the lowest close in two months after breaking a short-term consolidation range.  

After the beginning of the US session, NZD/USD dropped again under 0.6690, the lower limit of the mentioned range and extended losses. Following an increase in dairy prices at the latest GDT auctions rose modestly, finding resistance below 0.6680. The bounce was short-lived and weakened again falling below previous lows. It dropped to 0.6655 and as of writing trades at 0.6657/60, down more than 50 pips from Monday’s close.  

The kiwi was unable to recovery even as equity prices in the US erased daily losses. The US Dollar Index gains 0.95% and trades near 97.00.Data released today showed a slowdown in the US PMI Manufacturing Index to 53.8. On Thursday, the ADP and ISM reports are due.  

Levels to watch  

The technical outlook shows the pair vulnerable to the downside following the breakout of the 0.6690 area. Below 0.6650, the next support levels might be seen at 0.6630 and 0.6600/05. To the upside, a recovery back above 0.6700 would remove the short-term bearish pressure. The next resistances are seen at 0.6730 and 0.6745.