NZD/USD hangs closer to Thursday’s 10-month lows

The NZD/USD pair maintained its offered tone for the second consecutive session and now seems headed back to Thursday's 10-month lows touched in the aftermath of dovish RBNZ. 

Currently trading around 0.6835 level, just a few pips away from session lows, the pair continues to be weighed down by RBNZ's dovish tilt, downplaying the recent up-tick in inflation and reassuring to hold its current monetary policy stance. Adding to this, a drop in Business NZ Manufacturing Index during April did little to provide any immediate respite to the NZD.

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Moreover, a modest greenback recovery, with the key US Dollar Index reversing minor losses and now placed at session tops around 99.55 region, further collaborated to some renewed selling pressure in the past hour or so.

Meanwhile, with some stability in commodity prices, sliding US treasury bond yields seems to lend some support to the higher-yielding currencies - like the Kiwi, at least for the time being.

Today's US economic docket features the release of inflation figure, monthly retail sales data and Prelim UoM Consumer Sentiment, and would be looked upon for some fresh impetus. 

In the meantime, the US bond yield dynamics and broader market risk sentiment would remain key drivers of the pair's momentum on the last trading day of the week. Nevertheless, the pair remains on track for its lowest weekly close since late May 2016.

Technical levels to watch

Bears would be eyeing for a break through multi-month lows support near 0.6820-15 area, below which the pair is likely to accelerate the slide towards 0.6780 support before eventually dropping further towards the 0.6700 handle in the near-term.

On the upside, any recovery attempts might now confront immediate resistance near 0.6865 level, above which a bout of short-covering could lift the pair beyond the 0.6900 handle towards testing its next important hurdle near 0.6935 area.