“¢ Resurgent USD demand prompts some aggressive long-unwinding trade.
“¢ Technical selling further aggravates the rejection slide.
The NZD/USD pair came under some intense selling pressure on Tuesday and has now moved on the verge of breaking back below the 0.6800 handle.
The pair stalled its recent recovery move, witnessed over the past one week or so, and for the second consecutive session failed to make it through the 20-day SMA immediate hurdle.
Investors seem to have put escalating US-China trade tensions on the back burner, with a goodish pickup in the US Treasury bond yields helping revive the USD demand and end the recent bearish momentum.
In fact, the key US Dollar Index has now jumped back above the 94.00 handle and was seen as one of the key factors prompting some aggressive long-unwinding trade on Tuesday.
This coupled with some technical selling below Monday’s swing low support, near the 0.6830 region, further aggravated the selling pressure and collaborated to the pair’s heavily offered tone through the mid-European session on Tuesday.
Today’s relatively thin US economic docket, featuring the only second-tier release of JOLTS Job Openings, is unlikely to provide any meaningful impetus and the USD price dynamics might continue to act as an exclusive driver of the pair’s momentum.
Technical levels to watch
On a sustained break through the 0.6800 handle, leading to a subsequent weakness below 0.6780 level might turn the pair vulnerable to head back towards challenging the 0.6715-10 intermediate support ahead of the recent swing lows near the 0.6690-85 region.
Meanwhile, on the upside, the 0.6830 region now becomes immediate resistance, above which the pair is likely to make a fresh attempt towards conquering the 0.6860 heavy supply zone before eventually darting towards reclaiming the 0.6900 handle.
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