NZD/USD stages a minor recovery from 100-DMA support

After dipping to 8-week low on Tuesday, the NZD/USD pair staged some recovery on Wednesday after an unexpected jump in country's trade surplus.

The New-Zealand trade balance data released earlier on Wednesday came-in to show a surplus of $292m vs $60m expected and $117 recorded in the previous month. The pair is currently trading just above the mid-point of 0.6700 handle, though off day's peak of 0.6764 but still holding with some modest gains.

On Tuesday, the pair dropped to test 0.6700 handle after US new home sales data came-in far higher than consensus estimates. The pair did dip below the very important 100-day SMA but managed to recovery quickly from lower level.

The pair continues to find strong demand around the 100-day SMA region, suggesting some near-term base formation around 0.6720-0.6700 handle and thus becomes important pivot point in determining the pair's near-term direction.

Technical levels to watch

Sustained weakness below 0.6720-0.6700 important support seems to accelerate the fall immediately towards 0.6660-50 intermediate support and the fall could further get extended towards 0.6610-0.6600 round figure mark.

On the upside, 0.6765-70 area would be immediate resistance to watch for, above which the pair is likely to extend its recovery beyond 0.6800 handle, towards its next major resistance around 50-day SMA near 0.6840-45 region.