- NZ business activity outlook improved sharply.
- DXY recovery caps the rebound.
- Eyes on the US housing data and NZ GDT price index.
The NZD/USD pair extends its consolidative mode near two-month tops for the fifth straight session on Tuesday, with the bulls now looking to retain control above 0.70 handle.
NZD/USD: Will it take-out key resistance near 0.7030 levels.
The spot trades with sizeable gains so far this session, having resumed its bullish momentum seen over the last few trading sessions, mainly driven by the unwinding of the NZD shorts ahead of the key NZ Q4 GDP release.
Moreover, a solid improvement seen in the NZ business activityoutlook numbers and slightly upbeat business confidence gauge, as published by ANZ earlier today, prompted the spot to stage a solid rebound in the Asian trades.
However, the major appears to lack follow-through momentum, as the US dollar extends its broad-based overnight recovery after Treasury yields from 2.37% to 2.394%, the highest level since last Wednesday. The move higher in the US rates was on the back of the latest reports that the Republican US Senator Collins would vote for the tax bill.
Attention now turns towards the US housing data and Fonterra’s fortnightly auction results for fresh impetus on the prices. Also, the speech by the FOMC member Kashkari will be closely eyed for fresh insights on the rate hike outlook heading into 2018.
NZD/USD Levels to consider
The spot regained the 0.7000 psychological level), below which 0.6953 (10-DMA) and 0.6934 (Dec 13 low) are key near-term downside areas. To the topside, a break above 0.7034 (2-month tops) could open doors towards 0.7050 (100-DMA).