NZD/USD extends recovery beyond 0.70 mark, tests 200-DMA

The NZD/USD pair extended Thursday's rebound from 4-month lows and is now building on to its recovery back above 0.70 psychological mark. 

Currently trading at a fresh session peak, hovering around the very important 200-day SMA near 0.704 region, a broad based US Dollar retracement is helping the pair to register a goodish recovery on Friday. Moreover, the prevalent risk-on mood is further benefitting riskier assets/higher-yielding currencies - like the Kiwi. 

In absence of any fresh development, the current pull-back could also be attributed to short-covering after the pair showed a strong resilience to defend 0.70 psychological mark on daily closing basis. 

Next in focus would be second-tier US economic releases that include - goods trade balance, prelim wholesale inventories and flash services PMI.

From technical perspective, the pair remains closer to multi-month lows and has been flirting with 200-day SMA. Moreover, the recent recovery moves were also sold into, suggesting that the near-term depreciating move could get extended further even from current levels. 

Technical levels to watch

From current levels, up-move beyond 0.7060 horizontal resistance could get extended towards weekly high resistance near 0.7080-85 region above which the pair seems all set to surpass 0.7100 handle and head towards testing 0.7115-20 resistance area. On the downside, renewed selling pressure below 0.7030, leading to a subsequent break below 0.70 round figure mark, would confirm near-term bearish trend and is likely to drag the pair immediately towards 0.6950 horizontal support before darting towards 0.6900 round figure mark.

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