NZD/USD under intense selling pressure, plummets to 0.71 neighborhood

After repeated failures to sustain strength above 0.7200 handle, the NZD/USD pair came under intense selling pressure on Wednesday and plunged to the lowest level since January 17.

Tuesday's hawkish comments from various Fed officials lifted market expectations for an eventual Fed rate-hike action at the next FOMC meeting on March 14-15 and triggered a sharp up-move in the US treasury bond yields. Surging bond yields boosted the US Dollar across the board and is weighing heavily on higher-yielding currencies - like the Kiwi. 

The pair even shrugged off upbeat release of New-Zealand Overseas Trade Index and Chinese Manufacturing PMI print and accelerated the downslide below important moving averages (50,100 and 200-day SMAs) confluence support near the 0.7140-30 region. Meanwhile, possibilities of some stops getting triggered on a decisive break below this important confluence support could have further aggravated the selling pressure, dragging the pair closer to the 0.7100 handle. 

Focus now shifts to the US economic docket, which includes the release of personal income/ spending data, Fed's preferred inflation gauge - Core PCE Price Index and ISM manufacturing PMI for February, for some immediate respite for the bulls and fresh impetus for the pair's movement during NA session. 

Technical levels to watch

A follow through selling pressure below 0.7100 handle would turn the pair vulnerable to continue drifting lower towards 0.7050-45 intermediate support ahead of 0.7020-15 strong horizontal support. On the upside, moving averages confluence support break area near 0.7130-40 region now seems to act as immediate strong hurdle, which if cleared could lift the pair towards 0.7160 resistance ahead of 0.7190 strong barrier.