NZD/USD hanging near 6-week lows, just above 0.7200 handle

The NZD/USD pair remained heavily offered through the early NA session and has now moved dangerously close to an important support near the 0.7200 handle. 

The pair extended overnight slump and the initial leg of slide for the second consecutive session on Wednesday was triggered by a bearish GDP forecast and anticipated smaller surplus in 2019-2021 by the NZ Treasury. 

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Today's sharp downfall could also be attributed to some technical selling, especially after the pair's repeated failed attempts to move past 50-day SMA supply zone near the 0.7335 region. Meanwhile, possibilities of some long unwinding pressure, following a decisive break below 0.7280-70 support area, further collaborated towards aggravating the selling pressure. 

Currently trading around 0.7210 level, the lowest level since June 11, the pair is clearly the weakest among the major bloc and has failed to benefit from some renewed US Dollar selling bias. The greenback was being weighed down by the US President Donald Trump's remarks that he was ready to shut down the government in order to secure funding for a proposed wall along the US-Mexican border and that NAFTA will probably be eliminated.

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Today's US economic docket, highlighting the release of new home sales data is unlikely to be a game changer and hence, the pair seems poised to extend the bearish trajectory further during the NY trading session.

Technical levels to watch

Bears would be eyeing for a break through the 0.7200 handle, below which the pair is likely to accelerate the slide towards 100-day SMA near the 0.7165 are en-route the very important 200-day SMA support around 0.7125 region. 

On the upside, any recovery attempts might now confront some fresh supply near 0.7235 level, above which a bout of short-covering could lift the pair back towards 0.7275-80 horizontal resistance ahead of the 0.7300 handle.