NZD/USD tumbles to lows near 0.6900 handle, focus remains on Yellen speech
• Flirting with the 0.6900 handle ahead of GDT auction.
• Retracing commodity prices adding to the pressure.
• Thursday's RBNZ policy update holds the key.
The NZD/USD pair remained heavily offered through the early NA session and has now moved on the brink of breaking below the 0.6900 handle.
Growing market expectations for an upcoming Fed rate hike move in December reignited the US Dollar rally and prompted some profit-taking, especially after the pair's recent recovery move of around 140-pips from near 6-month lows touched in late October.
Ahead of the GDT auction, the pair was also pressurized by a sharp retracement in commodity prices, which tends to undermine demand for the resource-linked New-Zealand Dollar.
With the only scheduled release of JOLTS Job Openings data, there is nothing important due for release from the US economic docket. Later during the NY trading session, the Fed Chair Janet Yellen's scheduled speech might influence the US bond yields and provide some fresh impetus for higher-yielding currencies - like the Kiwi.
Meanwhile, investors are likely to refrain from placing aggressive bets and wait for the RBNZ monetary policy update, due to be announced during the early Asian session on Thursday.
• RBNZ: Monetary policy to remain accommodative - Westpac
Technical levels to watch
Weakness below the 0.6900 handle could get extended towards 0.6875 support, which if broken would turn the pair vulnerable to head back towards retesting 0.6830 strong horizontal support.
On the upside, 0.6945-50 zone now seems to have emerged as immediate resistance, above which a bout of short-covering could lift the pair back towards the key 0.70 psychological mark.