NZD/USD muted around 0.7100, US data eyed

The NZD/USD pair is seen reversing upbeat China CPI-led rally in the European morning, now trading flat near 0.71 handle, in search of fresh incentives from the session ahead.

NZD/USD on its way to 5-DMA at 0.7089

Currently, the NZD/USD pair trades almost unchanged at 0.7097, extending retreat from daily tops reached at 0.7132 earlier in Asia. The NZD/USD pair paused its three-day rally as the bulls face exhaustion, while broad based US dollar strength also weighs on the spot.  

The Kiwi rallied as high as 0.7132 after the Chinese CPI figures came in much stronger than markets’ expectations and eased concerns somewhat, especially after yesterday’s Chinese trade report reignited China slowdown concerns.

The major is expected to remain pressured as the US dollar is likely to remain on the front foot across the board amid increasing Dec Fed rate hike calls, as we progress towards the US retail sales and Fed Yellen’s speech due later in the day.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.7132 (daily high & 10-DMA), above which it could extend gains to 0.7150 (psychological levels) and from there to 0.7200 (round figure). To the downside immediate support might be located at 0.7050 (psychological levels) and from there to at 0.7015 (200-DMA), below which 0.6955 (multi-month lows) would be tested.