NZD/USD weaker around 0.7220 level, Thursday’s RBNZ decision awaited

After yesterday's tepid recovery bounce, the NZD/USD pair came under some renewed selling pressure on Wednesday and extended its rejection move from the 0.7300 handle touched at the beginning of this week.

The pair on Tuesday failed to build on early gains and was being weighed down by disappointing release of GDT Price Index, coming-in at -0.8% as compared to +0.6% at the previous auction. Adding to this, the hawkish Fed monetary policy outlook continued lifting the US Treasury bond yields and further contributed towards keeping a lid on any sharp up-move for higher-yielding currencies - like the Kiwi.

On Wednesday, a fresh wave of global risk-aversion trade and slide in the commodity space dragged the pair to weekly lows near 0.7220-15 region. Also collaborating to the offered tone surrounding the major was unwinding pressure ahead of the next key event risk - RBNZ monetary policy decision during early Asian session on Thursday.

   •  RBNZ to remain dovish - AmpGFX

The recent NZ GDP miss has resulted into expectations for a less hawkish RBNZ and hence, a follow through weakness remains a distinct possibility in absence of any major market moving economic releases from the US.

   •  NZ: GDP growth moderates, but demand remains strong - AmpGFX

Technical levels to watch

Immediate support is pegged at the 0.7200 handle, below which the pair is likely to accelerate the slide towards 0.7170 intermediate support en-route 0.7145-40 horizontal zone.

On the upside, momentum back above 0.7240 level now seems to confront strong resistance near 0.7270 region, which if cleared should lift the pair back above the 0.7300 handle towards retesting 4-month highs resistance near 0.7320 region.