NZD/USD plummets to over one-week lows, below mid-0.6800s
• Drop in NZ business confidence prompts aggressive selling.
• A modest USD uptick adds to the downward momentum.
• US economic releases eyed for fresh impetus.
The NZD/USD pair traded with a negative bias for the third consecutive session and has now retreated over 100-pips from Tuesday's near 3-week tops.
The pair came under some intense selling pressure on Thursday following a data that showed New-Zealand business confidence nosedived to -39.9 in November. The extent of the fall in confidence, in a knee-jerk reaction to the change in government, caught bulls off-guard and prompted some fresh long-unwinding trade.
Adding to this, a goodish pickup in the US Dollar demand, supported by yesterday's upbeat US GDP revision and a follow-through uptick in the US Treasury bond yields, further aggravated the selling pressure around higher-yielding currencies and collaborated to the pair's fall to over one-week lows.
Currently trading around the 0.6835-30 region, testing session lows, the market seems to have largely digested today's upbeat Chinese PMI prints and now look forward to the US economic releases for some fresh impetus.
Today's US economic docket features the key release of core PCE price index, personal income/spending data, along with the usual initial jobless claims and followed by Chicago PMI for November.
Technical levels to watch
Immediate support is pegged near 0.6820-15 area, below which the pair is likely to break through the 0.6800 handle and head towards retesting 17-month low level of 0.6780.
On the upside, the 0.6845-50 region, closely followed by 0.6875 level now seems to act as immediate resistance, which if cleared might trigger a short-covering move back beyond the 0.6900 handle towards 0.6925-30 supply zone.