NZD/USD regains poise, sellers exhausted or milk powder at rescue?

The recovery in the NZD/USD pair from near 0.70 levels for the second day raises question whether sellers have run out of steam or rise in milk powder prices is supporting the Kiwi.

Supported by 0.7021

Early selling had pushed the pair to 0.7021 from where the pair recovered to 0.7049 levels. The recovery from session lows suggests the sellers may have been exhausted following five day losing streak. A similar recovery from the low of 0.7010 was seen yesterday as well.

Moreover, a 1.9% rise in the whole milk powder prices at the GDT auction and the EU’s latest financial support package for the region's struggling farmers may have put a floor under the pair.  It remains to be seen if the data helps NZD/USD score gains today or the spot trades sideways for the rest of the day.

NZD/USD Technical Levels

A break above 0.7069 (23.6% of 0.6236-0.7326) would open doors for a re-test of psychological level of 0.71-0.7106 (5-DMA). A violation there could yield 0.7147 (June 9 high). On the flip side, breakdown of support at 0.70 (zero figure + 50-DMA) would expose 0.6963 (June 15 low) which if breached would shift risk in favor of a test of 100-DMA level of 0.6911.