NZD/USD off lows, defends 0.70 mark for the time being

The NZD/USD pair has managed to bounce off the 0.70 psychological mark and pared some of its weekly bearish gap opening losses.

A fresh wave of risk-off mood, after North Korea  fired four ballistic missiles into the sea off Japan’s northwest coast, weighed on riskier / higher yielding currencies - like the Kiwi.

Adding to this, renewed US Dollar buying interest, against the backdrop of growing market consensus for March Fed rate-hike action, further collaborated to persistent selling pressure and dragged the pair back towards retesting seven-week lows touched on Friday. 

Meanwhile, hints of bears taking some profits off the table, in wake of New-Zealand data showing improvement in the number of new building approvals issued during the month of January, also helped the pair to bounce off lows and defend the 0.70 handle, at least for the time being. The pair has managed to recover around 30-pips from session lows and is currently trading around 0.7030-35 band. 

In absence of any major market moving economic releases on Monday, the pair remains at the mercy of broader market risk sentiment and the US Dollar price-dynamics ahead of Minneapolis Fed President Neel Kashkari's speech later during NY session.

Technical levels to watch

A follow through recovery above 0.7040 level might trigger a short-covering rally towards 0.7100 round figure mark, en-route important moving averages confluence support break-point, now turned strong resistance, near 0.7140-50 region.

On the flip side, a convincing break below the 0.70 mark now seems to pave way for continuation of the pair’s near-term downward trajectory further towards 0.6955-50 horizontal support ahead of 0.6915 level.