NZD/USD drops to three-week low at 0.70 psychological mark

The NZD/USD pair ran through fresh offers near 0.7040 region and has now dropped to a fresh three-week lows. 

Currently hovering around 0.7000 psychological mark, the pair has now reversed all of its recovery gains recorded in the previous two weeks. Wednesday's hawkish Fed statement, projecting three rate-hikes in 2017, has been the key factor weighing on higher-yielding currencies - like the Kiwi. Moreover, softer tone around commodity markets is further denting demand for commodity-linked currencies , including the New-Zealand dollar. 

Today's US housing market data - building permits and housing starts will now be looked upon for immediate respite.

Technical levels to watch

A follow through selling pressure below 0.7000 mark is likely to drag the pair immediately towards 0.6972 (Nov. 24 low) below which a fresh bout of selling pressure would turn it vulnerable to head towards its next support near 0.6915-10 region. On the upside, 0.7030 level now becomes immediate resistance above which the recovery could get extended towards the very important 200-day SMA resistance near 0.7065-70 region.