The NZDUSD pair, currently at 0.62581, has experienced four consecutive days of decline and reached its lowest point in one week on Wednesday.

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• NZD/USD turns lower for the fourth straight day and drops to a one-week low on Wednesday.

The pair currently trades last at 0.62581.

The previous day high was 0.6345 while the previous day low was 0.6259. The daily 38.2% Fib levels comes at 0.6292, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6312, expected to provide resistance.

The NZD/USD pair fades an intraday bullish spike to the 0.6315 region and drops to a one-week low during the early European session on Wednesday. Spot prices, however, manage to recover a few pips in the last hour and currently trade just above mid-0.6200s, down just over 0.15% for the day.

The New Zealand Dollar (NZD) did get a minor lift following the release of stronger domestic consumer inflation figures, which showed that the headline CPI rose by 1.1% during the second quarter as compared to the 1% estimated. Moreover, the yearly rate decelerated less than expected to 6% during the reported period and forced investors to price in a more hawkish Reserve Bank of New Zealand (RBNZ). Apart from this, the prevalent risk-on environment pushed the NZD/USD pair higher, though concerns over slowing economic growth in China.

It is worth recalling that data released earlier this week showed that the economic growth in China decelerated substantially in the second quarter and Retail sales – a gauge of consumption – slowed sharply in June. This, in turn, acts as a headwind for antipodean currencies, including the Kiwi, which, along with a goodish pickup in the US Dollar (USD) demand, drag the NZD/USD pair lower for the fourth straight day. Doubts that the Federal Reserve (Fed) will commit to a more dovish policy stance prompt some short-covering around the USD.

The US Core Retail Sales – excluding automobiles, gasoline, building materials and food services – showed more resilience in June and fueled speculations that the Fed might stick to its forecast for a 50 bps rate hike this year. The markets, however, have been pricing out the possibility of any further rate hikes after the widely expected 25 bps lift-off in July. This is reinforced by a further steep decline in the US Treasury bond yields, which holds back the USD bulls from placing aggressive bets and assists the NZD/USD pair to bounce off the 0.6225 area.

This makes it prudent to wait for some follow-through selling before positioning for an extension of the recent retracement slide from levels just above the 0.6400 mark, or the highest level since early February touched last week. Market participants now look forward to the US housing market data – Building Permits and Housing Starts – for some impetus later during the early North American session. This, along with the US bond yields and the broader risk sentiment, might influence the USD and produce short-term opportunities around the NZD/USD pair.

Technical Levels: Supports and Resistances

NZDUSD currently trading at 0.6261 at the time of writing. Pair opened at 0.6273 and is trading with a change of -0.19 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.6201, 50 SMA 0.6174, 100 SMA @ 0.6195 and 200 SMA @ 0.6197.

The previous day high was 0.6345 while the previous day low was 0.6259. The daily 38.2% Fib levels comes at 0.6292, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.6312, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.624, 0.6206, 0.6154
• Pivot resistance is noted at 0.6326, 0.6378, 0.6412

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