NZD/USD on a minor correction from 3-month tops

The NZD/USD pair remains better offered so far this session, reversing a part of yesterday’s heavy gains, which drove the rate to fresh multi-month highs of 0.7207.

NZD/USD back near daily pivot at 0.7172

The major emerged the strongest across the fx board a day before, now attempting a minor-correction amid resurgent US dollar demand across the board and higher treasury yields.

The Kiwi extended rally for the third straight session on Tuesday, as markets cheered upbeat assessment of New Zealand’s economy by the NZ treasury.  Moreover, a solid rebound staged by oil prices, in the wake of rising Qatar tensions, also boosted the sentiment around the resource-linked NZD.

However, the pair failed to sustain the break above 0.72 handle, as the latest dairy auction results from Fonterra, showed a drop in the milk prices to +0.6% from +3.2% seen previously.

All eyes now remain on the US crude oil inventories data and Chinese trade figures for fresh momentum.

NZD/USD Levels to consider                                                                              

To the upside, the next resistance is located at 0.7200/07 (round number/ 3-month tops) above which it could extend gains to 0.7250 (psychological levels) and from there to 0.7280 (key resistance). To the downside immediate support might be located at 0.7155 (5-DMA), and from there to 0.7113/0.7100 (10-DMA/ round figure), below 0.7070 (200-DMA) would be tested.