NZD/USD continues the run lower in trading today
The pair was walloped in trading yesterday amid broader dollar strength, with the breakdown in technicals not helping and sellers got their wish of targeting 0.7000.
Now, we're seeing that run continue today. So, what's next for the pair?
The market is keeping a more defensive approach so far this week with the retreat in Treasury yields instead providing safety bids into the dollar.
Adding to that are a couple of key technical moves - one as seen above. EUR/USD is flirting with its early March lows and treading water below its 200-day moving average. Meanwhile, GBP/USD broke key support @ 1.3776 and may be targeting 1.3600 next.
Elsewhere, AUD/USD is also challenging its 100-day moving average for the first time since November last year and the early February lows @ 0.7564-83 to provide an additional key layer of support in preventing a further breakdown in the technicals.
Going back to NZD/USD, the push below the December lows @ 0.7003-06 and the 0.7000 only helps to exacerbate sellers' bias in the pair this week.
The drop now contests the 50.0 retracement level @ 0.6989 but beyond that, there is little standing in the way of a push towards the 200-day moving average (blue line) next.
While FX tends to react to changes in other markets most of the time, the technical push in the dollar here is feeding to sizable strength - which is not driven by yields anymore.
That sort of risk aversion move may create a feedback loop in markets and is one factor to consider as we see the dollar push through more barriers for now.