NZD/USD bears in full control, now eyeing 0.70 mark ahead of US ISM

   •  USD jumps to fresh multi-month tops and keeps exerting downward pressure.
   •  Surging US bond yields further aggravate the selling pressure on Tuesday.
   •  US ISM PMI/NZD GDT price index eyed ahead of NZ quarterly jobs report.

The NZD/USD pair continued losing ground on Tuesday and dropped to fresh 4-month lows, closer to the key 0.70 psychological mark in the last hour.

The pair has broken down significantly over the past three weeks, losing nearly 400-pips from April 13 swing high level of 0.7395, and was being weighed down by the recent strong US Dollar up-move to fresh multi-month tops. 

Adding to this, the ongoing upsurge in the US Treasury bond yields, amid speculations about a steeper Fed monetary policy tightening cycle exerted some additional downward pressure on higher-yielding currencies - like the Kiwi.

Currently placed just above the 0.70 handle, which is likely to attract a lot of attention, traders now look forward to the US ISM manufacturing PMI and NZ GDT price index for some impetus. 

On Wednesday, investors will also confront the quarterly release of NZ employment details, which along with this week’s key event/data, including the highly anticipated FOMC announcement and the keenly watched US NFP report, should help determine the pair’s next leg of directional move. 

Technical levels to watch

Weakness below the 0.70 handle is likely to accelerate the fall towards 0.6970 horizontal support before the pair eventually drops to mid-0.6900s. On the upside, 0.7030-35 area now becomes immediate resistance, above which the pair could make a fresh attempt towards reclaiming the 0.7100 handle.