NZD/USD has been impulsively bearish today as the pair broke below the key support area of 0.7050 recently. NZD has been quite strong amid recent economic reports which helped the currency to sustain the gain against USD. Nevertheless, today without any high impact economic reports the market just moved over 100 pips downwards engulfing the recent few days bullish price action in one go. Today, there are no economic reports from New Zealand, but tomorrow Visitor Arrivals report is due that previously was at -0.3% and Credit Card Spending report will be also released which previously was at 6.4%. There were no forecasts about this data, so the news can go either way, but certain speculation is against NZD. On the USD side, today Unemployment Claims report was published with a better-than-expected figure of 222k from the previous figure of 244k which was expected to be at 240k and Philly Fed Manufacturing report also came out with an upbeat figure of 27.9 from the previous reading of 23.8 which was expected to be at 21.9. Moreover, US CB Leading Index is going to be published which is expected to decrease to 0.1% from the previous value of 0.4% and Natural Gas Storage is expected to decrease to 59B from the previous figure of 87B. To sum up, despite positive economic reports from New Zealand, USD has dominated the pair with its impulsive gains today. This indicates that the price is set to proceed downward in the coming days. As the US economic reports this week have been quite positive, the pair is expected to move quite impulsively towards the next support level in the coming days.
Now let us look at the technical chart. The price is currently residing below the important level of 0.7050. In the coming days certain retracement towards 0.7050 is expected before price moves down towards 0.6850 support level. As the price remains below the dynamic level of 20 EMA and 0.7170 level with a daily close, the bearish bias is expected to continue further.
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