NZD/USD taps 0.7200 handle after GDT price index

The NZD/USD pair was seen building on to its break-out momentum above the very important 200-day SMA and has now surged to the highest level since mid-December.

Plunging US treasury bond yields has kept selling pressure around the US Dollar intact and is seen boosting demand for higher-yielding currencies - like the Kiwi. Meanwhile, the release of Empire state manufacturing index provided little respite for US Dollar bulls.

Meanwhile, the outcome of latest dairy auction, showing a rise in the GDT dairy price index by 0.6% as compared a sharp fall of 3.9% at the last auction, provided an additional boost and helped the pair to extend its near-term bullish trajectory to a 5-week high. The pair was last seen hovering around 0.7200 handle, with strong gains over 1.3% for the day.

Technical levels to watch

A follow through buying interest beyond 0.7223 (Dec. 8 high) is likely to confront resistance near 0.7237 area (Dec. 14 high) above which the pair seem all set to head towards its next resistance near 0.7280 region.

On the downside, 200-day SMA near 0.7155-50 region now becomes immediate support, which if broken is likely to accelerate the slide back towards 0.7100 round figure mark, with some intermediate support near 0.7125 region.