NZD/USD fades post-NZ GDP spike to 0.7020

• Bounces-off a dip below 0.7000.
• NZ GDP data continues to underpin.
• US economic releases eyed.

The NZD/USD pair staged a solid comeback on the release of New Zealand’s Q4 GDP upward revision, storming through the 0.7000 mark in early trades. However, the bulls quickly lost vigor and reversed almost 25 pips rapidly from 0.7020 highs to now consolidate around 0.70 handle.

The Statistics New Zealand reported, “Gross domestic product increased 0.6 percent in the September 2017 quarter, following an increase of 1.0 percent (revised) in the June 2017 quarter."

The renewed upside in the Kiwi lacks follow-through as the US dollar extends the recovery from 3-week lows against its main competitors, with the dust settling over the US tax bill approved by the House.

Also, the major remains on the back foot as New Zealand’s trade deficit and the GDT auction outcome continue to still weigh down on the NZD.

Meanwhile, markets resort to repositioning ahead of a fresh batch of key US macro releases later today, while year-end flows also help to buoy the sentiment around the greenback.

NZD/USD Levels to consider

The spot hovers near the 0.7000 psychological level), with 0.6983 (10-DMA) and 0.6934 (Dec 13 low) key near-term downside areas. To the topside, a break above 0.7034 (2-month tops) could open doors towards 0.7041 (100-DMA).