NZD/USD slides back closer to over 5-month lows

   •  Weighed down by RBNZ easing prospects.
   •  Retracing US bond yields fails to lend support. 
   •  FOMC and NFP hold the key. 

The NZD/USD pair came under some renewed selling pressure on Monday and dropped back closer to over 5-month lows touched last week. 

The pair's sharp weakness at the start of a new trading week could be attributed to comments by the new NZ Finance Minister Robertson, stating that the RBNZ could potentially lower interest rates. 

With the market looking past Friday's upbeat US Q3 GDP growth numbers, speculations over the next Fed Chair announcement and a sharp retracement in the US Treasury bond yields kept the US Dollar on the back-foot but did little to lend any support to the higher-yielding currency Kiwi.

Currently trading around 0.6850-45 band, traders now look forward to today's US economic docket, featuring the release of core PCE price index - Fed’s preferred inflation gauge, along with personal income/spending data, for some fresh trading impetus.

The key focus, however, would be on the FOMC decision on Wednesday and the keenly watched NFP on Friday, which would help determine the pair's next leg of directional move.

Technical levels to watch

A follow through weakness below 0.6830 level, leading to a subsequent break below 0.6820-15 area (Friday's low), would turn the pair vulnerable to break below the 0.6800 handle and aim towards testing its next support near the 0.6775-70 region.

On the flip side, immediate resistance is now pegged near the 0.6875-80 zone, above which a bout of short-covering could lift the pair back above the 0.6900 handle towards its next major hurdle near 0.6950 level.