RBNZ’s Wheeler jawbones NZD/USD to a session low of 0.7231

NZD/USD hit a session low of 0.7231 after RBNZ Governor Wheeler said a weaker NZD is needed to increase tradable inflation and help deliver more balanced growth. 

Having clocked a high of 0.7268 earlier today, the spot now trades around 0.7242 levels; down 0.18% on the day. The retreat from the high of 0.7268 has kept the descending trend line [from Aug 1 high] intact.

Head and Shoulders neckline offers support, NZ 10-yr yield resilient

The head and shoulders neckline support of 0.7231 has saved the day for Kiwi. The technical support may hold, given the resilience the NZ 10-year government bond yield, which has eased slightly from the daily high of 2.91%, but is still up 2 basis points on the day. 

Later in the US session, the neckline support could be breached in a convincing manner if the US GDP is revised higher. 

NZD/USD Technical Levels

A break below 0.7231 [neckline support] would expose 0.7192 [Aug 24 low]. An end of the day close below the same would open doors for a sell-off to 0.71 [61.8% Fib R of 0.6818-0.7558]. On the higher side, breach of resistance at 0.7275 [38.2% Fib R of 0.6818-0.7558] could yield rally to 0.73 [zero levels] and 0.7346 [June 30 high].