NZD/USD heavy, looks to test 0.6818 ahead of NZ jobs

• NZD weighed down by risk-off.
• Politics continue to drive sentiment.
• NZ jobs in focus.

The NZD/USD pair came under renewed selling pressure in Asia, after having failed near 0.6880 regions on yet another occasion, paving the way for a test of 5-month lows reached last week at 0.6818.

NZD/USD extends bearish consolidation

The Kiwi reversed yesterday’s entire recovery gains, although remains confined with the recent 60-pips trading range, as the bears continue to fight back control amid looming concerns over how the new New Zealand government will deliver on its reforms plans, especially the RBNZ review.

Meanwhile, resurgent USD demand combined with downbeat official Chinese manufacturing and services PMI reports also added to the weight on the NZD/USD pair. Also, the spot suffers on account of persisting risk-off trades, in the wake of weaker Asian equities and oil prices.

Looking ahead, the risk remains to the downside, despite NZ Fin Min’s pacifying comments and Moody’s optimistic outlook on the NZ growth, as the prices will be driven by risk trends and USD dynamics ahead of the key US data and NZ employment report.

NZD/USD Levels to consider

The NZD slips back below 0.6850 (psychological levels), below which 0.6818 (5-month low) and 0.6800 (round number) are key near-term downside areas. To the topside, a test of 0.6880/85 (key resistances) due on the cards, which could open doors towards 0.6900 (10-DMA).