NZD/USD: Bears guarding key 0.6960 barrier, NZ GDT on sight

• USD, USTs catch a minor bid in Asia.
• RBNZ review launched.
• NZ Treasury’s GDP forecasts weigh.
• NZ GDT price index data on tap.

The NZD/USD pair extends its upside consolidative mode for the third straight session on Tuesday, as the bulls turn cautious ahead of the NZ GDT price index release and RBNZ policy outcome.

NZD/USD: Will the buyers regain control?

The Kiwi stalled its Asian retreat just ahead of the key support near 0.6925 region and now attempts a tepid recovery in a bid to chew the strong offers located near 0.6960 region.

The spot quickly eroded nearly 30-pips on reports of the launch of the RBNZ mandate review, while the NZ Treasury report combined with NZ PM Ardern comments also added to the renewed weakness in the domestic currency.

Meanwhile, a broadly higher USD alongside positive Treasury yields dampened the demand for the Kiwi as an alternative higher-yielding currency. The USD index recovered to 94.70 in Asia, reversing a dip to 94.60 lows.

Attention now shifts towards the critical NZ GDT price index data and second-tier US macro news slated for release in the NA session.

NZD/USD Levels to consider

The NZD remains supported above 0.6925/23 (daily pivot/ 5-DMA), below which 0.6897 (10-DMA) and 0.6875 (Nov 6 low) are key near-term downside areas. To the topside, a test of 0.6950 (psychological levels/ 20-DMA) due on the cards, which could open doors towards 0.6975/76 (classic R1/ Fib R2).