NZD/USD looks vulnerable below 0.7070

The NZD bears appear to have taken a breather after yesterday’s massive sell-off, allowing a tepid-recovery in the NZD/USD pair.

NZD/USD capped below 0.7100

Currently, the NZD/USD pair trades almost unchanged at 0.7083, having faced rejection just below 0.71 handle. The Kiwi is seen stuck in a phase of downside consolidation so far this session, unable to find support from better-than expected Chinese PMI reports.

The NZD/USD pair suffered heavy losses yesterday, in response to a solid rally staged by the US treasury yields, which dulled the attractiveness of the emerging market currency NZD as an alternative higher-yielding asset.  However, the sell-off stalled near Tuesday’s low as ongoing bullish momentum in oil prices offered some respite to the commodity-currency.

With the OPEC meeting behind, focus now shifts towards the US fundamentals, especially the US NFP report, for next direction on the major.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7100/05 (zero figure/ Nov 28 high), above which it could extend gains to 0.7143 (50-DMA) and from there to 0.7209 (100-DMA). To the downside immediate support might be located at 0.7070/60 (key support/10-DMA) and from there to at 0.7041 (daily S1), below which 0.6949 (July low) would be tested.