NZD/USD weighted by higher DXY & poor GDT, targets 0.6860

The NZD/USD pair turns back on the offers and breaches 0.69 handle once again, as a favorable sentiment towards the greenback and weak NZ fundamentals continue to weigh on the spot.

NZD/USD trades below all major DMAs

Currently, the NZD/USD pair drops -0.30% to meander near session lows of 0.6890, eyeing a test of multi-month lows struck last week at 0.6859. The Kiwi faces double whammy so far this Wednesday, as broad based US dollar strength exerts bearish pressure on one hand, while a steeper drop in the NZ GDT price index also dents the sentiment around the spot.

Moreover, with full markets returning today, the NZD remains sold into the divergent monetary policy outlook between the Fed and RBNZ, with investors now gearing up for the Dec Fed meeting minutes, when the Fed turned outrightly hawkish, calling for three rate hikes in 2017 versus 2 seen in Sept meeting. Apart from the FOMC minutes, the US calendar remains fairly light today, leaving the major to the mercy of the risk trends and USD price-action.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6919/26 (10 & 5-DMA), above which it could extend gains to 0.6951 (20-DMA) and from there to 0.7000 (round figure). To the downside immediate support might be located at 0.6890 (daily low) and from there to at 0.6859 (multi-month lows), below which 0.6800 (zero figure) would be tested.