NZD/USD flirting with 100-DMA important support

The NZD/USD pair extended its sharp reversal from weekly high level of 0.7310 and traded lower for fourth straight session amid broadly stronger greenback.

Currently trading around 0.7150-55 region, the pair remained well offered below 0.7200 handle and has now moved within striking distance of 100-day SMA support. The greenback continues to benefit from Wednesday's release of stronger-than-expected US ISM non-manufacturing PMI print for September, which negated disappointing headline print from ADP report on US private-sector employment.

Although Wednesday's releases did little to alter market expectations over the timing of next Fed rate-hike action but kept hopes alive of such an action by the end of this year and eventually dented demand for higher-yielding currencies - like Kiwi, which was already under selling pressure on the back of Tuesday’s disappointing GDT Price Index data. 

Traders on Thursday will be looking forward to the US weekly jobless claims data for short-term momentum play ahead of Friday's key NFP data, which would determine the pair's near-term trajectory.

Technical levels to watch

On a sustained weakness below 0.7145 region (100-day SMA support), the pair is likely to accelerate the slide immediately towards 0.7100 handle before eventually dropping to 0.7085-80 support area.

Meanwhile on the upside, 0.7175-80 area level now seems to have emerged as immediate resistance, which if cleared should assist the pair to stage additional recovery beyond 0.7200 handle towards 0.7220 strong resistance.