FxWirePro: NZD/USD extends weakness for the 3rd straight session, break into cloud will drag the pair lower

NZD/USD chart - Trading View 

NZD/USD was trading 0.16% lower on the day at 0.7221 at around 05:20 GMT.

The pair is extending weakness for the 3rd straight session and is on track for further downside.

Reserve Bank of New Zealand (RBNZ) officials maintain a cautiously optimistic outlook towards the much-anticipated rate hike action. 

Earlier in the day, the New Zealand government released a 10-month financial statement marking a lesser than expected deficit of 3.57 billion New Zealand dollars (NZD). 

Broad-based U.S. dollar strength weighing on the pair. US dollar index (DXY) extends marginal gains on a day, backed by weaker US Treasury yields and sluggish stock futures.

Technical indicators for the pair are biased lower. Price action has slipped below 20-DMA and 5-DMA caps upside.

Bearish RSI divergence from price action on the daily charts keeps scope for further downside. 

Daily cloud offers immediate support at 0.72. Break below will see test of 55-EMA at 0.7189.