NZD/USD erases Tuesday’s recovery gains

The NZD/USD pair snapped a two-day recovery momentum and turned lower on Wednesday, erasing all of its recovery gains posted in the previous session. 

Currently trading around 0.7275-80 band, the pair on Tuesday filed to sustain its recovery move above 0.7300 handle after the greenback caught fresh bids on surprisingly strong consumer confidence index, which surpassed market expectations and rose to the highest level since August 2007. Moreover, hawkish comments from the Federal Reserve Vice Chairman Stanley Fischer further supported the US Dollar.

The greenback extended its bid tone on Wednesday and exerted fresh selling pressure around the major. Adding to this, the kiwi continues to be undermined by market expectations of further interest rate-cut by RBNZ at its meeting in November and thus, has failed to attract any fresh buying interest.

Traders on Wednesday would look forward to the release of monthly durable goods orders from the US in order to capture short-term momentum play. Also in focus would be the Fed Chair Janet Yellen's testimony later during NY trading session.

Technical levels to watch

A follow through selling pressure below 0.7260 immediate support is likely to drag the pair immediately towards 50-day SMA support near 0.7240-35 region below which the pair would turn vulnerable to to break below multi-week lows support near 0.7220 and head towards testing its next major support near 0.7130 region, nearing 100-day SMA.

On the flip side, 0.7300 handle now becomes immediate strong resistance, which if cleared has the potential to lift the pair immediately towards 0.7350 before the pair makes an attempt to reclaim 0.7400 handle and aim towards testing September daily closing highs resistance near 0.7450 region.