NZD/USD: N. Korea-driven risk-off caps the recovery above 0.7250

The NZD/USD pair stalled its recovery mode just ahead of 0.7250 barrier and now heads back towards the daily lows struck earlier at 0.7221, as sentiment remains sour amid escalating North Korea tensions.

NZD/USD headed to 0.7200?

The Kiwi maintains the offered tone in the Asian trades, extending its range-trade into a fifth day, as markets await fresh impetus from the Chinese manufacturing PMI reports for further momentum.

In the day ahead, risk remains to the downside, as the demand for the higher-yielding risk currencies such as the US rates, NZD, equities and oil prices took a hit on the latest round of North Korea news, which spooked markets once again.

North Korea launch several missiles test, which were fired into Japan’s airspace, and highly condemned by South Korea, Japan and US.

However, the Kiwi may continue to find fresh buyers near 0.7200 levels, as ongoing weakness in the US dollar against its major peers, in the wake of Yellen’s disappointing speech could help keep the downside cushioned.

Calendar-wise, there is nothing of note for the major until the US session, which sees the release of the US consumer confidence data.

NZD/USD Levels to consider                                                                              

NZD/USD failed above 0.7250 (natural resistance), with 0.7200 (round figure) still guarding 0.7152 (200-DMA) and a break back below 0.7100 (key support) are key near-term downside areas. To the topside, a test of 0.7265 (10-DMA) due on the cards, which could open doors towards 0.7285 (20-DMA).