NZD/USD fails to sustain recovery move back above 0.70 mark

The NZD/USD pair's attempted recovery to session peak level of 0.7011 got sold into and the pair has now weakened back below 0.70 psychological mark.

Currently trading around 0.6990-85 region, the pair witnessed a short-covering bounce amid moderate pick-up in the profit-taking selling pressure around the greenback. The recovery, however, lost momentum as Wednesday's FOMC meeting minutes and solid US economic data underpinned speculations for an imminent Fed rate-hike action at its December meeting. The minutes also revealed that the central bank might continue with its monetary policy tightening in 2017 in order to prevent the economy from overheating. 

Meanwhile, a fresh wave of selling in European equity markets is further denting demand for riskier assets and is eventually weighing on higher-yielding currencies - like Kiwi. 

Technical levels to watch

Immediate downside support is pegged near 0.6955-50 region, which if broken is likely to accelerate the slide towards 0.6900 round figure mark. On the upside, sustained recovery momentum above 0.70 psychological mark could get extended towards 200-day SMA resistance near 0.7025-30 area above which a fresh bout of short-covering could lift the pair back towards weekly high resistance near 0.7080-85 region.

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