NZD/USD: in consolidation in slow start Asia, bearish bias to 0.6880

• NZD/USD: more downside to come on the back of the dollar's resurgence.
• NZD/USD: eyes are set on the 0.6880 support level or 0.7040 to the upside. 

NZD/USD is starting out the week in a quiet market with the Aussies out for Labour day. Currently, NZD/USD is trading at 0.7018 with a high of 0.7021

NZD/USD has been on the backfoot as the dollar resurgence continues. On Friday, the greenback rallied to 92.57 as theUS economic outperformance remains compelling. The key data came in the nonfarm payrolls where an initial sell-off in the greenback was reversed given the unemployment rate dipped to 3.9% from 4.1%,  (market shrugged off the slightly weaker-than-expected employment growth and a dip in earnings growth).

Commodity complex

The commodity complex was also firmer on the back of a rally in risk which slowed down the downside break to just below the 0.70 handle. Bulls came in there and took the pair to as high as 0.7026 from 0.6994 session post NFP lows.  WTI up 1.9% to the highest level in three years as markets speculate about re-imposition of US sanctions on Iran. Gold also gained 0.2%.

Analysts at ANZ explained that "while corporate hedging demand is evident (supporting the downside), and markets will position themselves ahead of Adrian Orr’s first MPS this week, we still expect the NZD to remain on the back foot."

NZD/USD levels

While stuck below the 10-D SMA, technicals lean bearish still with the RSIs biased to the downside  Support is at 0.6880 and resistance is at 0.7040/50 (21-4hr SMA)  and 0.7180 on the wide.