NZD/USD dips below 0.73 ahead of Powell testimony

• NZD/USD dips below 0.73 on NZ trade data.
• Investors to scrutinize Powell testimony
• Is Kiwi creating a double top pattern?

NZD/USD is reporting moderate losses in Asia, courtesy of a dismal New Zealand trade data. 

The currency pair ran into offers around 0.7320 after Statistics New Zealand reported a trade deficit of NZD 566 million, wider than the NZD 227 million deficit in January last year and the largest for the month since 2007. Exports jumped 9.5 percent, while the imports surged 17 percent, both hitting new highs for January month. 

As of writing, the Kiwi is changing hands at 0.7290 - down 0.16 percent on the day. Also, the spot is down 1.97 percent compared to Feb. 16 high of 0.7437. 

The trade number has pushed Kiwi on the back foot ahead of the new Fed chair Jerome Powell's testimony. That said, the investors believe US Federal Reserve chair Jerome Powell will remain measured in his first testimony (due later today). Further, the 399 points rally in Dow and the positive action in the Asian equities is likely helping NZD avoid big losses. 

Double top pattern on the daily chart

The pair could be creating a double top pattern with neckline support at 0.7176 (Feb. 8 low), according to the price action on the daily chart. A decline to 0.7176 cannot be ruled out if Powell stresses the need for faster rate hikes. 

NZD/USD Technical Levels

The short-term momentum studies - 5-day moving average (MA) and 10-day MA are trending lower in favor of the bears. So, the spot could test the support of ascending 50-day MA located at 0.7241. A violation there would expose 0.72 (psychological level) and 0.7176 (double top neckline). A daily close below the neckline would confirm a bullish-to-bearish trend change. 

Meanwhile, on the higher side, a cut through 5-day MA of 0.7310 could yield 0.7343 (10-day MA). A close higher would shift attention to recent highs above 0.73.