NZD/USD jumps to 0.7050, shrugging off weak trade balance data

Ignoring weak trade balance data, the NZD/USD pair staged a remarkable recovery from sub-0.7000 mark and is now comfortably trading above well above the handle, around mid-0.7000s, slightly off session peak level of 0.7063.

A broadly weaker US Dollar has been the key factor supporting the pair's recovery from a multi-week low level touch recently. The pair shrugged-off data showing fall in exports, which further boosts the prospects of RBNZ rate cut in August. 

However, trader might now turn cautious ahead of the Fed monetary policy decision, scheduled to be announced on Wednesday. Although the central bank is widely expected to hold status quo, but a hawkish outlook would now fuel expectations of an imminent rate-hike later during the year and would be highly supportive for the US Dollar.

Technical levels to watch

From current levels, momentum above 0.7065 horizontal resistance is likely to get extended beyond 0.7100 handle, towards 0.7120-30 strong resistance. On the flip side, weakness back below 50-day SMA support near 0.7015 region, and a subsequent break below 0.7000 psychological mark, would negate possibilities of any further recovery and might turn the pair vulnerable to drift towards testing 100-day SMA support near 0.6925-20 region.