NZD/USD struggling to extend recovery further beyond 0.70 handle

The NZD/USD pair pared some of its disappointing NZ GDP-led losses and has now recovered back to the key 0.70 psychosocial mark. 

The pair on Thursday came under some selling pressure on New-Zealand's fourth quarter GDP data that showed economy recorded a growth of 0.4% q-o-q, down from previous quarter's 0.8% (revised lower from 1.1% reported early) and 0.7% growth expected. 

However, the post-FOMC slide in the US treasury bond yields, pushing the US Dollar Index to one month low, limited further downslide and helped the pair to bounce off lows. The recovery, however, was restricted in wake of a modest recovery in the bond yields and as the greenback selling pressure abated during early European session. 

Moving ahead, the USD price dynamics would remain an exclusive driver of the pair's movement as traders now look forward to Thursday's US economic docket featuring the release of housing data, Philly Fed manufacturing index and the usual weekly jobless claims data. 

Technical levels to watch

Bulls would be disheartened if the pair failed to hold session lows support near 0.6985 level, below which the pair is likely to accelerate the reversal move back towards 0.6935 intermediate support ahead of the very important 0.6900 handle.

On the upside, 0.7040 level now becomes immediate hurdle, which if cleared decisively is likely to assist the pair to extend recovery move further towards 0.7100 round figure mark, en-route 100-day SMA barrier near 0.7115 region.