NZD/USD turns sharply lower, 0.7100 at risk

Having jumped to a 3-week high level of 0.7170, the NZD/USD pair snapped three days of winning streak and turned mildly lower amid renewed greenback strength.

Currently hovering around 0.7100 handle, testing session lows, the pair's profit-taking slide extended further during early NA session after stronger-than-anticipated ADP report on US private sector employment added on to Tuesday's upbeat macro data - Q3 GDP and consumer confidence, and further boosted investors' confidence over faster US economic growth in 2017. Today's upbeat ADP report might have now raised barrier for Friday's official report, NFP, where current market expectation is pointing to 174K new jobs in November as compared to October's 161K.

Meanwhile, comments from Dallas Fed President Robert Kaplan reiterated removal of Fed's accommodative monetary policy stance and supported the prevalent bullish sentiment surrounding the greenback. Kaplan, however, warned that a stronger US Dollar might hurt country's exports and thus, favored a gradual pace of monetary policy tightening. 

Wednesday's US economic docket also features the release of Chicago PMI and pending home sales data, which would be looked upon to grab some short-term trading opportunities. 

Technical level to watch

Sustained weakness below 0.7100 handle is likely to accelerate the slide towards 0.7065-60 horizontal support ahead of the very important 200-day SMA support near 0.7040 region. On the upside, 0.7125 level now becomes immediate hurdle, which if cleared should assist the pair beyond session peak resistance near 0.7170 region and boost it towards 100-day SMA resistance near .7195 region.