NZD/USD hits 6-week lows, 0.72 mark back on sight

The NZD/USD pair extended overnight sharp reversal from 0.7335 level (50-day SMA region), pushing the rates to a six-week low during the early European session.

Currently trading around 0.7220 level, the NZ Dollar remained under intense pressure for the second consecutive session and the bearish fall gathered momentum following the release of NZ Govt Pre-election Economic Fiscal Forecasts, anticipating a smaller surplus in 2019-2021 on lower growth. 

Meanwhile, bulls were little inspired by the NZ Treasury forecast that the Reserve Bank of New Zealand (RBNZ) could start raising interest rates from mid-2018, with the pair extending its downward trajectory to hit the lowest level since June 11.

Adding to this, falling commodity prices, which tends to weigh on commodity-linked currencies - like the Kiwi, and a broadly stronger US Dollar further collaborated towards aggravating the selling pressure surrounding the major. 

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From a technical perspective, the pair's repeated failures at the 50-day SMA hurdle, and a subsequent break below the recent lows, clearly indicates that the near-term corrective slide might still be far from over. 

Technical levels to watch

On a sustained weakness below the 0.72 handle, the pair is likely to accelerate the fall towards 100-day SMA near the 0.7165 region en-route the very important 200-day SMA Support around the 0.7125 region.

Meanwhile, on the upside, any recovery move back above 0.7230 level now seems to confront fresh supply near 0.7255-60 region, above which a bout of short-covering could lift the pair back above the 0.7300 handle back towards 50-day SMA hurdle near the 0.7335 region.