NZD/USD off-highs, drops back towards 0.7150

The bid tone behind the NZD is seen weakening a bit in the Asian trades this Monday, sending NZD/USD lower to near 5-DMA located at 0.7169.

NZD/USD remains capped just below daily R1

Currently, the NZD/USD pair trades almost unchanged at 0.7168, heading for a test of daily lows struck at 0.7149. The recovery mode in the NZD/USD pair is seen losing steam, despite subdued trading activity seen around the US dollar against its major peers, as weaker oil prices hurt the resource-linked Kiwi.

Moreover, with the US second presidential debate underway, markets have shifted on the side-lines, while holiday-thinned trading also fails to provide any impetus on the NZD/USD pair.

Looking ahead, all eyes will be on a series of Fed speaks, China trade and CPI data due later this week, which is likely to have significant impact on the spot.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7207 (100-DMA), above which it could extend gains to 0.7251 (20-DMA) and from there to 0.7275 (50-DMA). To the downside immediate support might be located at 0.7110 (two-month lows) and from there to at 0.7084 (Aug 7 low), below which 0.7064 (Jul 29 low) would be tested.