NZD/USD bears dominant, Friday’s multi-month low at risk

The NZD/USD pair remained heavily offered through the early NA session and is currently placed within striking distance of Friday's 5-1/2 month lows.

The already weaker sentiment around the NZ Dollar deteriorated further after data released on Tuesday showed New Zealand business confidence index fell sharply to -10.1 in October, which followed the softer outcome in September (0.0). 

This combined with downbeat official Chinese manufacturing and services PMI added to the selling pressure around the major. 

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Meanwhile, a modest rebound in the US Treasury bond yields helped the US Dollar to erase early losses and further collaborated towards driving flows away from higher-yielding currencies - like the Kiwi. 

The greenback buying interest remained unabated, in fact, got a minor boost from the US Employment Cost Index and continued exerting pressure on the major. 

Next on tap would be the release of Chicago PMI and CB consumer confidence, which would be looked upon for some immediate respite for the bulls ahead of NZ employment report, due for release during early Asian session on Wednesday. 

Technical levels to watch

A follow-through weakness below 0.6830 level is likely to accelerate the fall towards the 0.6800 handle before the pair eventually drops to test 0.6770 horizontal support. 

On the upside, any recovery attempts might continue to confront fresh supply near the 0.6875 region, above which a bout of short-covering could lift the pair back above the 0.6900 handle towards its next major hurdle near 0.6945 area.