NZD/USD jumps to weekly high, inching closer to 100-DMA

After an initial dip below 0.7150, the NZD/USD pair regained its lost ground and has now jumped to a fresh weekly high level.

Currently trading around 0.7180 region, the pair caught fresh bids at lower level amid broad based US Dollar retracement and is now fast approaching 100-day SMA support break-point, turned resistance. 

The greenback, as measured by the overall US Dollar Index, struggled to gain further bullish traction and extended its corrective slide from multi-month highs as traders seemed inclined to trim bullish USD bets ahead of this week's key US macro releases, which include - monthly durable goods orders on Thursday and advance GDP print for third quarter on Friday. 

However, the prevalent risk-off mood, as depicted by weaker sentiment surrounding European equity markets, might restrict further up-move. Moreover, given market expectations of an eventual Fed rate-hike action by the end of this year and further monetary easing by RBNZ at its meeting in November, the current bounce back from Tuesday’s six-day low near 0.7110 level might be looked upon as an opportunity to initiate fresh short positions. 

Meanwhile, today's release of new home sales and flash services PMI from the US might provide some impetus during NA session on Wednesday.

Technical levels to watch

Immediate upside resistance is pegged at 100-day SMA near 0.7190 region above which the pair is likely to extend the recovery momentum beyond 0.7220 intermediate resistance towards 50-day SMA resistance near 0.7250 region. On the flip side, sustained weakness below 0.7150 immediate support now seems to drag the pair below weekly lows support near 0.7110 level and 0.7100 handle, towards its next major support near 0.7050 region.