NZD/USD recovery remains capped below 0.70 mark

Upbeat ANZ Business Confidence index helped the NZD/USD pair to stage recovery move on Monday from a 6-month low touched in the previous session. 

Currently trading around 0.6975 level, the pair gained traction after NZ data showed a rise in business confidence for December. In fact, ANZ's business confidence index rose to 21.7 from 20.5 in November. Meanwhile, the activity outlook also jumped to 39.6% in December, from previous month's 37.6%. Today's numbers provide some respite for bulls and helped the pair to witness a good rebound from 0.6930 region, the lowest level since June 7 touched on Friday. 

Moreover, a broad based greenback retracement also seems to contribute to the pair's recovery on Monday as investors seemed inclined to lock-in some profits and lighten USD bullish bets ahead of holiday season. 

From technical perspective, the pair has confirmed a decisive break below the very important 200-day SMA and recovery momentum remained capped below an important support break-point, now turned immediate resistance near 0.70 psychological mark. In absence of any fresh trading cues, the current bounce back could be on the back short-covering and categorized as consolidation before the next leg of directional move. 

Technical levels to watch

From current levels, 0.7000 psychological mark now becomes immediate resistance above which a fresh bout of short-covering is likely to boost the pair towards 0.7030 intermediate resistance, en-route the 200-day SMA hurdle near 0.7065-70 region. On the downside, sustained weakness below 0.6950 support is likely to accelerate the slide towards 0.6915-10 horizontal support ahead of 0.6900 round figure mark.