NZD/USD trades below mid-0.678s, looks to snap 4-day winning streak

• Mixed data from the U.S. hurt the greenback on Wednesday.
• US Dollar Index drops to weekly lows below 97.
• Coming up: Retail sales and industrial production data from China.

The sharp drop seen in major Asian equity indexes on Wednesday hurt the risk-sensitive kiwi and forced the NZD/USD pair to lose its traction after closing the previous three days in the positive territory. Following a drop to a session low of 0.6830, the pair staged a modest rebound in the NA session and was last seen trading at 0.6845, losing 0.2% on a daily basis.

Today’s data from the U.S. showed that the PPI rose 0.1% on a monthly basis in February following January’s 0.1% decline and ticked down to 1.9% annually to match the market expectation. On a positive note, durable doos orders expanded 0.4% in January to surpass the market expectation for a contraction of 0.5% and construction spending increased by 1.3% on a monthly basis in January.  

Uninspired by the mixed data, the US Dollar Index continued to push lower and touched its lowest level in a week at 96.72 to  help the pair find support. At the moment, the index is down 0.25% on the day at 96.75.

In the early hours of the Asian session, retail sales and industrial production data from China will be looked upon for fresh impetus. Any signs of the Chinese economy picking up momentum could help the pair reverse its course and vice versa.

Technical levels

The pair could encounter the initial support at 0.6830 (daily low) ahead of 0.6805/0.6800 (100-DMA/psychological level) and 0.6745 (Mar. 7 low). On the upside, resistances align at 0.6860 (daily high), 0.6900 (psychological level/Feb. 27 high) and 0.6940 (Feb. 1 high).