NZD/USD retraces from 5-day high after GDT price index

Having posted a 5-day high level of 0.7358, the NZD/USD pair lost its upside momentum and has now retraced over 35-pips from session peak.

Currently trading around 0.7325, a tepid greenback recovery, despite of disappointing US housing market data led to the initial leg of profit taking move. Adding to this, the latest dairy auction showed the GDT price index rose by 1.7%, which was well below 7.7% rise recorded in the previous auction and exerted further selling pressure around the major.

With the results of the latest dairy auction out of the way, focus shifts back to the keenly awaited BOJ and the Fed monetary policy decisions that would help investors derive greenback demand and would eventually determine the pair's near-term trajectory.

Technical levels to watch

Immediate downside support is seen at 0.7310-0.7300 region, which if broken is likely to drag the pair back towards 0.7250 support area. On the upside, 0.7350 now seems to have emerged as immediate strong resistance above which the pair is likely to make a fresh attempt to reclaim 0.7400 handle.