NZD/USD sellers show up in force ahead of the 0.7100 level

• NZD/USD has been on the back foot in recent trade and has reversed from highs just shy of 0.7100 back towards 0.7000.
• Selling was exacerbated as the pair broke below a short-term uptrend.

Amid a deterioration in the market’s broader appetite for risk in recent trade, NZD/USD has reversed from earlier highs of just beneath the 0.7100 level and is heading back towards the 0.7000 level. The pair rallied to these heights during Wednesday Asia and early European trade in tandem with a strong AUD in wake of strong Westpac Consumer Sentiment numbers. Indeed, NZD might have also have taken some impetus from strong New Zealand Manufacturing Sales Volumes numbers for Q3, released early in the Asia pacific session. Regardless, amid the recent pullback, the pair is now trading with losses of over 0.2% or 20 pips on the day.

NZD/USD slips below recent short-term uptrend

NZD/USD has slipped below a short-term uptrend in recent trade which linked the lows of the 7 and 8 December. The uptrend came into play as support around the 0.7050 area. Now that the pair has broken below this uptrend, eyes are on support just ahead of the 0.7000 level. Should this key psychological level go, the door will have been opened to a move lower towards the pair’s 21-day moving average at 0.6971. Conversely, should the bears regain control, NZD/USD might recover back towards Wednesday’s highs at 0.7096 and could even test the 0.7100 level and last week’s high just above it at 0.7105.

NZD/USD one hour chart