NZD/USD: swooping in below the 0.6920, heavy below 200-M SMA

• NZD/USD headed for a break of 0.79 the figure where demand is sighted below.
• NZD/USD heavy while below the 200-M SMA located at 0.6980.

NZD/USD is swooping in below the 0.6920 level as early Asia gets going and the dollar extends its dominance across the higher betas as yield differentials remain the underlying motivation behind the dollar's recent resurgence, despite trade war and geopolitical angst. 

Currently, NZD/USD is trading at 0.6913, down -0.76% on the day, having posted a daily high at 0.6976 and low at 0.6911 and analysts at ANZ explained that the NZD remains on the back foot and is again eyeing up a test of the 0.69 level as the USD staged a modest comeback and kiwi eyes up downside levels on a number of crosses: 

"Some near-term momentum indicators are looking oversold, and underlying demand is evident. However, yield differentials suggest the move can extend."

Eyes turn to US retail sales

Meanwhile, for the week ahead, all eyes will turn to the US retails sales as a potential major catalyst.  Analysts at Nomura argue that excluding sales of autos, food, gasoline and building materials, core (“control group”) retail sales likely rose a steady 0.3% m-o-m in April. "Retail activity appears to have been steady despite colder-than-usual weather in some regions in April," which should underpin the dollar and the notion that the Fed is on track to hike rates at least three times in 2018 and two in 2019, whereas the RBNZ seems to be on hold for a considerable period of time, the last meeting around sighting the next move from the Central Bank is a coin toss between a cut of a hike. 

NZD/USD levels

Support comes in at 0.6880 and resistance at 0.7080. The NZD/USD had dropped below the key 200-month moving average support at 0.6980 and technicals stay bearish while RSIs are biased to the downside longer-term on the daily and weekly sticks. 0.6780 comes as next downside target meeting the lows of mid-Nov 2017. However, 0.6860 should be a firm support line before then.