“¢ Disappointing NZ retail sales data prompts some fresh selling.
“¢ Persistent USD buying interest adds to the downward pressure.
“¢ Now seems vulnerable in wake of a pickup in the US bond yields.
The NZD/USD pair extended its retracement slide from an intraday high level of 0.6932 and eroded a major part of its Friday’s goodish up-move.
The pair came under some renewed selling pressure at the start of a new trading week after the official data came in to show that New-Zealand retail sales volumes were up just 0.1% on a quarterly basis and added to the recent signals that the economy is slowing.
Meanwhile, the ongoing US Dollar upsurge got an additional boost after the US Treasury Secretary Steven Mnuchin declared the US trade war with China “on hold” and further collaborated to the pair’s retracement back below the 0.6900 handle.
The selling pressure now seems to have abated a bit, at least for the time being, with bears still likely to maintain their dominant position amid some renewed pickup in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies – like the Kiwi.
Technical levels to watch
Immediate support is pegged near the 0.6870-60 region, which if broken now seems to pave the way for an extension of the pair’s near-term bearish trajectory towards 0.6830-25 intermediate support en-route the 0.6800 handle.
On the flip side, the 0.6920-25 region now seems to have emerged as an immediate hurdle, above which a fresh bout of short-covering could lift the pair further towards 0.6960-65 intermediate resistance ahead of the key 0.70 psychological mark.
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