“¢ The prevalent risk-off mood helps revive greenback’s safe-haven demand.
“¢ Weaker commodities/technical selling further aggravates the selling pressure.
“¢ Traders now eye second-tier US economic data for some short-term impetus.
The NZD/USD pair extended this week’s retracement slide from near one-month tops and kept losing ground for the third consecutive session on Thursday.
Having once again failed to sustain/build on its momentum beyond the very important 200-day SMA, the pair witnessed some aggressive long-unwinding pressure and was not being weighed down by a modest US Dollar uptick.
A slight deterioration in risk appetite, as depicted by a weaker tone around equity markets, provided a minor boost to the greenback’s relative safe-haven status and was seen driving flows away from perceived riskier currencies – like the Kiwi.
Today’s downfall could also be attributed to some follow-through technical selling below the 0.6800 handle, with the prevalent weaker tone around commodity space exerting some additional downward pressure on the commodity-linked currency.
Moving ahead, today’s second-tier US economic releases – initial weekly jobless claims and Philly Fed Manufacturing Index, will now be looked upon for some short-term trading impetus later during the North-America session.
Technical levels to watch
Immediate support is pegged near the 0.6720-15 region, below which the pair is likely to break through the 0.6700 handle and retest mid-0.6600s important horizontal support. On the flip side, the 0.6770-75 region, closely followed by the 0.6800 handle now seems to act as immediate strong resistance, which if cleared might lift the pair back towards 0.6845-50 supply zone.
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