NZD/USD breaks below 0.74 handle, hits two-week lows

The NZD/USD pair remained heavily offered for the third straight session and has now weakened below the 0.7400 handle to two-week lows.

The pair extended its rejection slide from 0.7525-30 strong supply zone and today's slide could be attributed to weaker domestic data, showing Commodity Price Index slipped 0.8% m/m in July. Against the backdrop of recent weaker NZ fundamentals, including yesterday's weaker employment data, downbeat Chinese Caixin services PMI further dampened investors' sentiment and further collaborated to the already weaker tone surrounding the major. 

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Meanwhile, a modest US Dollar recovery, following yesterday's slump to fresh 15-month lows in wake of weaker ADP report, was also seen weighing on the major through early European session on Thursday.

From a technical perspective, the pair has now broken below its immediate strong support near the 0.7415 region and hence, an extension of the overdue correction now seems a distinct possibility.

Later during the NA session, the US economic data - weekly jobless claims, ISM non-manufacturing PMI and factory orders data, would now be looked upon for some fresh trading impetus. 

Technical levels to watch

A follow through weakness has the potential to continue dragging the pair towards 0.7465-60 horizontal support, which is closely followed by support near 0.7335-30 region. On the flip side, any recovery move might now confront some fresh supply near 0.7415 level, above which the pair could move back towards mid-0.7400s ahead of its next hurdle near 0.7475 level.