NZD/USD well-offered near 4-month lows

Having dropped to four-month low near 0.6970 region, the NZD/USD pair has managed to bounce-off session low but was seen struggling to recover back above 0.70 psychological mark.

Currently trading around 0.6980 level, the pair remained well-offered for the second straight session amid broad based greenback strength led by Wednesday's strong US durable goods orders data and hawkish FOMC meeting minutes. The minutes revealed that policymakers agreed to raise rates "relatively soon" against the backdrop of improving labor market conditions and expected inflation trajectory and reaffirmed market expectations of December Fed rate-hike action, which continues to underpin the greenback and weigh on higher-yielding currencies - like Kiwi.

Meanwhile, the pair seems to have found some support at lower levels as traders seemed reluctant to build fresh short-positions amid holiday thinned liquidity conditions, which might limit any sharp moves on Thursday.

Technical levels to watch

Immediate downside support is pegged at 0.6955-50 region (July lows) below which a fresh leg of weakness might drag the pair below 0.6900 handle towards its next major support near 0.6870-65 area. On the upside, any recovery back above 0.70 psychological mark might now confront resistance at the very important 200-day SMA near 0.7030 region, which if cleared might trigger a short-covering bounce back towards weekly highs resistance near 0.7080-85 region.