The NZD/USD pair maintained its strong bid tone through early NA session and reversed around 50% of previous session’s disappointing NZ GDP-led corrective losses to sub-0.7200 level.
The pair’s up-move gained extra legs in wake of today’s disappointing US housing market data, which seems to have prompted some additional profit taking move around the greenback. In fact, the key US Dollar Index is now placed near session low around 97.30 region and has been one of the key factors supportive of the strong bid tone surrounding the major.
This coupled with a sharp post-data retracement in the US Treasury bond yields extended an additional support to higher-yielding currencies – like the Kiwi, and drove the pair higher to session tops near 0.7240-45 region.
Today’s US economic docket also features the preliminary release of UoM Consumer Sentiment Index for June, which is unlikely to stop the pair from closing with some gains for the fifth consecutive session at the highest weekly close since late Jan.
Technical levels to watch
Immediate resistance is pegged near 0.7260-70 region, above which the pair is likely to make a fresh attempt to conquer the 0.7300 handle and then aim towards testing its next major hurdle near 0.7340-50 region.
On the downside, the 0.7200 handle now becomes immediate support to defend, which if broken now seems to drag the pair towards 0.7170 intermediate support en-route 0.7140 strong horizontal support.