NZD/USD continues to trade near 30-month lows after disappointing GDT auction

• NZD/USD breaks below mid-0.65s to refresh its lowest level since Feb. 2016.
• Upbeat PMI data from the U.S. help the US Dollar Index preserve its bullish momentum.
• GDT auction reveals a decline in GDT price index.

The NZD/USD pair extended its losses for the sixth straight day on Tuesday and touched its lowest level since early 2016 at 0.6540. As of writing, the pair was trading a couple of pips above that level, losing 0.86% on the day.

Earlier in the day, the NZD struggled to find demand as concerns over the U.S. - China trade relations continue to keep investors on edge. On Thursday, the U.S. is expected to impose new tariffs on $200 billion worth of Chinese goods.

On the other hand, the data from the U.S. on Tuesday showed that the manufacturing businesses were concerned about the potential negative impact of trade tariffs, the business activity continued to expand at a faster pace than expected. The Markit Manufacturing PMI and the ISM Manufacturing PMI came in at 54.7 and 72.1 respectively to beat the analysts' estimates. After staying quiet on Labor Day, the US Dollar Index gained traction on Tuesday and touched its highest level in two weeks at 95.74 before retracing a portion of its gains. At the moment, the index is up 0.4% on the day at 95.50.

In the meantime, New Zealand's bi-weekly GDT auction showed that the GDT price index declined 0.7% following the 3.6% fall witnessed in the previous auction and put some additional selling pressure on the kiwi.

Technical levels to consider

The pair could face the initial support at 0.6500 (psychological level), 0.6460 (Feb. 2, 2016, low) and 0.6415 (Jan. 27, 2016, low). On the upside, resistances are located at 0.6600 (daily high), 0.6660 (Aug. 31 high) and 0.6715 (50-DMA).