NZD/USD breaks below 0.68, refreshes session low near 0.6780

• Chicago Fed’s National Activity Index surpasses expectations.
• US Dollar Index stays in the positive territory above 94.50 in the NA session.  
• Technical indicators point to strengthening bearish momentum.

The NZD/USD pair started the day on a positive note and advanced to a fresh six-day high at 0.6823 but struggled to preserve its momentum in the second half of the day. As of writing, the pair was trading at 0.6782, losing 0.4% on the day.

The greenback finally received some demand from the participants in the early NA session after the National Activity Index released by the Federal Reserve Bank of Chicago rose to 0.43 in June from -0.45 in May. Although existing home sales showed a 0.6% reduction in June to miss the market expectation of 0.5%, the DXY remained in the positive territory. As of writing, the index was up 0.1% at 94.58.

On the other hand, the USD/CNY is up 0.36% on the day, pointing out to a relatively weak CNY, which has been weighing lately on the NZD amid New Zealand’s  trade relation with China. In fact, the AUD/USD pair is also losing more than 0.5% to reflect the negative impact of CNY valuation.

Technical outlook

There won’t be any other macroeconomic data releases in the remainder of the day and the pair is likely to close below 0.68. On the daily chart, the RSI indicator turned south before rising above the  50 mark, suggesting that the sellers are not giving away their control of the pair’s price action. On the downside, the initial support for the pair could be seen at 0.6750 (Jul. 11 low) ahead of 0.6715 (Jul. 20 low) and 0.6685 (Jul 2/3 low).  

Technical resistances align at 0.6825 (daily high), 0.6875 (50-DMA) and 0.6920 (Jun. 24 high).