NZD/USD bears en route to 0.72 as US GDP strengthened the US Dollar

• The NZD/USD bears are gaining momentum as the US GDP exceeds expectations.
• The NZD/USD price action is mainly driven by the US Dollar positive sentiment.

The NZD/USD is trading at around 0.7223 down 0.64% on Wednesday as the US Dollar is having a boost across the board. 

The NZD/USD price action is currently mainly dictated by the US Dollar sentiment as the macroeconomic calendar for the NZD is relatively quiet. Earlier in the US Session, the US Gross Domestic Product (GDP) for the fourth quarter of last year exceeded expectations and came in at 2.7% versus 2.9% forecasted by analysts. On the other hand, the Personal Consumption Expenditure Price Index (PCE) which is the favorite inflation indicator of the Federal Reserve, came in line with expectations at 2.9% for the fourth quarter of 2017. 

The US Dollar Index is benefiting from a wave of optimism since Tuesday as the tensions between the US and China over trade tariffs is starting to ease. Also worth noting, the meeting between China's President Xi Jinping and North Korean leader Kim Jong-un in Beijing has increased hopes for peace in the Korean peninsula and somewhat bolstered the market mood. The US Dollar Index is currently trading up at 89.80 with bulls targetting the 90 handle.

NZD/USD 4-hour chart

The bears broke below the 0.7231 swing low and are now targetting the 0.72 handle, previous swing low. If bears maintain the momentum going the next support is seen at 0.7160 cyclical low. To the upside, resistance is seen at 0.7160 cyclical low and 0.7260 supply/demand level.