NZD/USD recovers to 0.68, looks to close week with small losses

• USD weakness lifts the NZD/USD pair to the 0.68 mark in the NA session.
• The U.S. Q2 GDP growth comes in at 4.1%.
• US Dollar Index erases daily gains, remains in the positive territory for the week.

After easing to a fresh weekly low at 0.6760, the NZD/USD pair reversed its course in the second half of the day with the greenback coming under a broad-based selling pressure after the GDP data. At the moment, the pair is trading near 0.6800, adding 10 pips on the day.

The highly-anticipated data of the week, the first estimate of the real-GDP growth in the second quarter of 2018 in the United States, came in at 4.1% following the first quarter’s 2.2% reading. Despite the solid improvement seen in the data, the greenback failed to find demand as investors have been pricing the possibility of a reading close to 5% amid speculations about US President Donald Trump leaking that information and the White House Economic Advisor Kudlow’s comments.  

After falling to a daily low at 94.63, the US Dollar Index seems to have studied near the 94.70 mark, where it’s still down 0.07% on the day. On a weekly basis, however, the index remains on track to close modestly higher.  

The pair is likely to continue to trade near the 0.68 handle remainder of the day amid low trading volumes ahead of the weekend. Moreover, investors may refrain from taking any large positions before next week’s critical central bank events and macroeconomic data releases.

Technical outlook

With a weekly close above 0.6800 (psychological level), the pair could extend its recovery gains toward 0.6850 (Jul. 25/Jul. 26 high) and 0.6920 (Jun. 24 high). On the flip side, supports could be seen at 0.6760 (daily low), 0.6710 (Jul. 19 low) and 0.6685 (Jul. 3 low).