NZD/USD inches lower towards 0.70

The NZD/USD pair spends the day under pressure on Wednesday, erasing yesterday's gains and testing the 0.70 handle. At the moment, the pair is trading at 0.7002, down 0.58% on the day.

The pair is seen to be responding to the greenback's strength, which has been increasing in the NA session in tandem with the U.S. Treasury bond yields. The 10-year T-bond yield has gained more than 2% on the day after falling to a fresh low since Trump's election victory on Tuesday.

Remarks by the U.S. Treasury Secretary Mnuchin has lent some support for the USD on Wednesday. However, today's rise seen in the US Dollar Index hasn't been convincing enough to assume a deeper correction. The index is still below the significant 100 mark. Later in the session, Boston Fed's Rosengren's remarks and the Fed's Beige Book will be looked upon for some short-term trading opportunities. In the early trading hours of the Asian session, the CPI data from New Zealand will be watched closely as it's expected to rise from 0.4% to 0.8% in the first quarter of 2017.

Technical outlook

The pair could encounter the first technical resistance at 0.7025 (20-DMA) before 0.7075 (100-DMA) and 0.7130 (200-DMA). To the downside, with a break below 0.7000 (psychological level), the pair could target 0.6975 (Apr. 14 low) and 0.6910 (Apr. 12 low).