NZD/USD off-highs, consolidates near 0.7050

The NZD/USD pair reversed a spike to 0.7070 region, and now consolidates near the lower bound of today’s range so far, finding support from risk-on rally in the Asian equities.

NZD/USD holds above 0.7040 – key support

Currently, the NZD/USD pair trades modestly flat at 0.7049, heading for a test of daily low struck previously at 0.7044 levels. The Kiwi defends mild gains as the bulls guard the 0.7040 barrier, the confluence of 5 & 10-DMA, with the resurgence of risk-on trades keeping the bids intact for the higher-yielding currency NZD.

The Business NZ-BNZ Performance of Manufacturing Index (PMI) rose to 57.1 in May, the highest since January, from a revised 56.6 in April, while the ANZ-Roy Morgan Consumer Confidence Index rose 2.3% to 118.9 in June, in line with historical averages, from 116.2 a month earlier.

The major also finds impetus from broad based US dollar retreat as markets digest weaker US inflation numbers. Markets now look forward to the US housing starts and building permits data for further momentum on the NZD/USD pair.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7088 (June 16 High), above which it could extend gains to 0.7100/11 (round number/ daily R1). To the downside immediate support might be located at 0.7040 (5 & 10-DMA) and from there to at 0.7000 (June 9 Low).