NZD/USD retreats to 0.7100 as US dollar recovers and Wall Street trims gains

• US dollar moves off lows in New York as Yellen’s speaks.
• NZD/USD with a bearish bias, looking at the 0.7100 area.

The NZD/USD pair is back near weekly lows after hitting at the beginning of the American session 0.7133. It turned to the downside and printed a fresh daily low at 0.7101. As of wiring, it trades at 0.7110, around Monday’s close.

The move off highs in NZD/USD took place amid a modest recovery of the US dollar across the board and following a correction in equity prices in Wall Street. Main indexes are in positive ground but off highs.

Market participants are hearing from Treasury secretary nominee Janet Yellen at the Senate. She mentioned that considering interest rates are at historic lows, the smartest thing is to act big.

The DXY is falling by 0.28%, trading around 90.50, hit by risk appetite. The kiwi is among the weakest currencies on Tuesday. AUD/NZD climbed to 1.0840, the highest level in three months.

From a technical perspective, the NZD/USD is still under pressure. The recovery from Monday’s low has been short-lived. So far on Tuesday, the pair has been able to hold above 0.7100. A break lower would open the door to more losses. On the upside, the key level could be seen at 0.7150/55 (horizontal level and the 20-SMA in 4-hour chart); a consolidation above should alleviate the bearish pressure.

Technical levels