NZD/USD plummets to two week low

After repeated failures to conquer 100-day SMA, the NZD/USD pair finally broke on the downside and is now extending its downslide further below 0.7100 handle.

Currently hovering around 0.7060 region, testing two-week lows, the pair on Wednesday came under intense selling pressure after the Fed raise its key benchmark interest-rate by 25 bps points and upgraded its outlook. Hawkish Fed outlook weighed heavily on higher-yielding currencies - like the Kiwi, and underpinned the greenback, with the overall US Dollar Index hitting its highest level since March 2003.

From technical perspective, the pair faced rejection at 100-day SMA and witnessed a sharp reversal from four week lows touched prior to the Fed announcement. Hence, a subsequent break below the very important 200-day SMA strong support would turn the pair vulnerable to resume with its prior weakening trend in the near-term.

On the economic data front, US CPI print for November, Philly Fed Manufacturing Index and weekly jobless claims data, would be looked upon for some immediate respite for bulls. 

Technical levels to watch

From current level, monthly low at 0.7043 is likely to act as immediate support below which the pair is likely to accelerate the slide towards 0.70 psychological mark support. On the upside, 0.7085-90 area now becomes immediate resistance, which if cleared might assist the pair towards 0.7120-25 horizontal resistance.