NZD/USD - Challenging bids around 0.71

NZD/USD is sliding in line with broad based USD strength, now testing demand around 0.71 handle. The bird clocked a low of 0.7098 levels.

USD ruling the roost

American dollar remains solidly bid in Asia on account of the oil-led rise in the treasury yields. Moreover, the sharp rally in oil and exhaustion on part of other major cenral banks not only fuels steepening of the yield curve across the globe, but also increases the odds of a Fed rate hike in December.

The spot remains at the mercy of the overall market sentiment. Reserve Bank of New Zealand Assistant Governor John McDermott will deliver a speech at a private event today. The topic is 'Understanding Low Inflation in New Zealand'.

NZD/USD Technical Levels

Acceptance below 0.71 would be a major blow to the bulls, given the spot is already trading below major moving average levels – 50-DMA and 100-DMA. Breach of next support at 0.7049 (Apr 20 high) would expose 0.70 handle. On the higher side, a move above 0.7110 (Friday’s low) could trigger a much sharper retracement to 0.7155 (100-DMA) and 0.7204 (10-DMA).