NZD/USD: Bulls rescued by oil-price rally, 0.7000 back on sight

• Finds buyers once again just ahead of 0.6950, as higher oil prices support.
• Short-covering rally to extend ahead of the RBNZ rate decision?

The NZD/USD pair is seen making minor recovery attempts in the mid-Asian session, having found solid bids once again near the midpoint of the 0.69 handle.

Bulls fighting hard to take-out 0.6970 resistance

The spot reversed most losses but remains within a striking distance of five-month troughs reached at 0.6954 last hour, as the US dollar continues to remain in demand across its main competitors following the Iran deal fallout. The US President Trump pulled the US out of Iran’s nuclear deal and is likely to re-impose sanctions on Iran.

However, the bulls managed to find some respite from the overnight rally in oil prices, after Trump’s decision on Iran deal is expected to tighten oil supplies from the OPEC’s third-biggest oil exporter.

Also, a bout of short-covering cannot be ruled out heading into the RBNZ interest rates decision due out early Thursday, especially after the recent declines. Meanwhile, markets digest the NZ electronic card transactions weaker print ahead of the US PPI release for further trading impetus.

NZD/USD Technical Levels

To the upside, resistances are aligned at 0.6984 (daily pivot), 0.7000 (round number/ 5-DMA) and 0.7015 (10-DMA/ classic R1). Meanwhile, the downside remains cushioned by 0.6954 (5-month lows), below which floors open for a test of 0.6908 (classic S2/ Fib S3) and 0.6850 (psychological levels).