NZD/USD heavy, breaches 0.7000 on NZ Q4 GDP miss

The NZD is back in the red zone and reverses almost a quarter of yesterday’s extensive rally in NZD/USD, triggered by a less hawkish FOMC statement and upbeat NZ current account data. The current account data showed shrinking deficit, having arrived at 2.335bn versus -2.425bn expected and -5.09bn last.

In Asia this Thursday, the NZD/USD pair got sold into downbeat New Zealand’s GDP data for the fourth quarter,  coming in at 0.4% q/q and well below the expected +0.7% q/q. The previous was revised down as well to +0.8% from +1.1%. 

Moreover, a minor-bounce seen in the US dollar against most of its majors, also exacerbates the pain in the spot. The USD index rises +0.11% to 100.47, reversing from post-FOMC troughs struck at 100.25.

In the day ahead, the spot will remain at the mercy of the USD dynamics, as we head into another round of crucial US economic releases.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7049/50 (20-DMA/ psychological levels), above which it could extend gains to 0.7096/0.7100 (100-DMA/ zero figure) and from there to 0.7158/59 (100 & 200-DMA). To the downside immediate support might be located at 0.6961/49 (5 & 10-DMA) and from there to 0.6889 (Jan 4 & 3 low), below 0.6859/ 50 (Dec 23 low/ psychological levels) would be tested.