NZD/USD fades a spike to 0.7120, weaker Oil weighs

The New Zealand dollar shaved-off most gains against its American counterpart in mid-Asia, with the NZD/USD pair now struggling to keep 0.71 handle.

NZD/USD supported at 0.7080

The Kiwi is trying hard to defend the bid tone, as renewed oil-price weakness combined with rising treasury yields weigh down sentiment around the spot. Higher treasury yields dull the attractiveness of the Emerging Market currency – NZD as an alternative higher-yielding asset.

The major failed to resist the rebound beyond 0.71 handle, witnessed on the back of improved NZ business outlook and upbeat Chinese PMI reports. ANZ's monthly business outlook improves, takes NZD/USD through 0.71

Meanwhile, NZD/USD continues to find support from slightly upbeat RBNZ financial stability report and optimistic remarks from the RBNZ Chief Wheeler on the house price inflation.

Next of note for the major remains the US data releases due later in the day, including the Chicago PMI, pending home sales and Beige book. Also, speech by FOMC member Kaplan will be closely eyed.

NZD/USD Levels to consider                                                                              

To the upside, the next resistance is located at 0.7118 (daily high), above which it could extend gains to 0.7147 (classic R2/ Fib R3) and from there to 0.7200 (round number). To the downside immediate support might be located at 0.7073/69 (5 & 200-DMA), and from there to 0.7038/26 (10 & 100-DMA), below 0.7009 (classic S2/ Fib S3) would be tested.