The NZD/USD pair trimmed some of its early Asian session gains and retreated over 30-pips from closer to the 0.7300 neighborhood.
The pair, however, has managed to hold in positive territory for the second consecutive day and is currently trading around 0.7265-70 band amid thin trading activity at the start of a new week.
A lackluster US Dollar action helped the pair to build on Friday’s strong up-move led by disappointing US housing market data, which seems to have raised skepticism over prospects of a faster Fed rate-tightening cycle through 2017.
However, a modest up-tick in the US Treasury bond yields, against the backdrop of last week’s hawkish Fed decision, was seen keeping a lid on higher-yielding currencies and has capped the pair below the 0.7300 handle, at least for the time being.
In absence of any major market moving economic releases, the Chicago Fed President Charles Evans’ speech would look upon for some fresh clues over the Fed’s near-term monetary policy outlook and could provide some fresh impetus for the major.
Technical levels to watch
Immediate support is pegged near 0.7250 level, below which the pair is likely to accelerate the slide towards 0.7220-15 region before eventually dropping back below the 0.7200 handle towards retesting 0.7180-70 horizontal support.
On the upside, sustained momentum above the 0.7300 handle is likely to get extended beyond last week’s 4-month highs resistance near 0.7320 level towards its next hurdle near mid-0.7300s.