NZD/USD erodes 40-pips rapidly, refreshes lows near 0.6840
- Fails to benefit from broad USD weakness.
- Poor NZ data, risk-off weigh.
- Focus on the US Senate tax vote.
The NZD/USD pair experienced three-way price action in Asia, initially having knocked-off to 0.6845 levels on the back of downbeat NZ macro news, before staging a solid rebound to 0.6885 region on resurgent USD supply.
The US dollar got broadly hammered on the WSJ reports of Special counsel Robert Mueller’s investigators have issued a subpoena to Trump’s election campaign for documents related to Russia.
However, the spot failed to sustain at higher levels and dropped back below the midpoint of 0.68 handle on the back of re-emergence of risk-off trades, after the sentiment soured on the back of fresh North Korea headlines, citing that the North is aggressively working on a ballistic missile submarine.
Moreover, a negative surprise seen in the NZ PPI report combined with deteriorating business manufacturing sector activity also remains a drag on the prices. In the day ahead, the risk-off market profile will continue to drive the sentiment behind the major, as investors gear up for the US housing data set.
NZD/USD Levels to consider
The NZD breaks below 0.6850/45 (psychological levels/ Nov 14 low), below which 0.6818 (multi-month lows) and 0.6800 (key support) are key near-term downside areas. To the topside, a test of 0.6895/0.6902 (20 & 10-DMA) due on the cards, which could open doors towards 0.6919 (Nov 15 high).