NZD/USD: Upside seems capped near 0.7150

The bears flex their muscles in the mid-Asian session, capping the recovery in NZD/USD once again near the mid-point of 0.71 handle.

NZD/USD back towards 20-DMA at 0.7120

Currently, the NZD/USD pair turns negative below 0.7130, heading for a test of daily lows struck at 0.7117 in the last hour. The Kiwi is seen failing every attempt to rise above 0.7150 levels as cautious tone prevalent in the markets weigh on the sentiment towards risk/higher –yielding currencies such as the NZD.

Moreover, retreating oil prices combined with Australia’s sovereign credit rating downgrade to negative by S&P, further out a lid on the prices. Looking ahead, the Kiwi will continue to track the USD moves in light of the latest FOMC minutes ahead of the US ADP jobs report, which will be published alongside the jobless claims data later in the NA session.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7164 (5-DMA), above which it could extend gains to 0.7210 (daily S3). To the downside immediate support might be located at 0.7100 (round number) and from there to at 0.7080 (Jul 6 low).