NZD/USD defend 0.7000 mark, still struggling near 200-DMA

The NZD/USD pair managed to defend 0.7000 psychological mark and staged a goodish recovery led by upbeat economic data from New-Zealand.

Currently trading around 0.7020 region, the pair found some buying interest at lower levels after NZ quarterly retail sales recorded a growth of 0.9% for the third quarter of 2016. It is, however, worth reporting that the data point is a press leak and is yet to be confirmed by the official sources. Hence, it should be treated with caution as the official data is due for release on November 15.

From technical perspective, the pair has broken below the very important 200-day SMA for the first time since March and is headed for second consecutive week of losses. Hence, a follow through selling pressure would turn the pair vulnerable to build on to its slide of nearly 400-pips from 0.7400 handle, 2-month high, touched during the early half of this month. 

Today's focus would be on a slew of speeches from various FOMC members, including James Bullard, William Dudley and Esther George. Following Thursday's hawkish comments from the Fed Chair Janet Yellen, on the economy and rate hike, various Fed speakers might further fuel strong bullish sentiment surrounding the US Dollar and attract fresh selling pressure around the major.

Technical levels to watch

From current levels, 0.7000 psychological mark remains immediate support to defend, which if broken is likely to accelerate the slide immediately towards 0.6950 horizontal support. On the upside, recovery momentum above 0.7035 region (session peak) could get extended but is likely to be restricted by a strong horizontal resistance near 0.7065 level.

To learn more about this topic, check our video analysis