NZD/USD jumps back closer to one-month highs ahead of FOMC minutes

The NZD/USD pair continued gaining traction through early NA session and has now jumped to fresh session tops near 0.7035-40 region.

With the US Dollar extending its consolidative price-action, a modest pull-back in the US treasury bond yields was seen driving flows towards higher-yielding currencies - like the Kiwi, and has been a key factor driving the pair higher. 

Traders looked past Moody's decision to cut China's credit rating and the pair regained traction in wake of today's better-than-expected NZ trade balance data. Meanwhile, traders also seemed reluctant to carry any bearish bets ahead of the NZ annual budget, due for release during early Asian session on Thursday, which should also help investors to determine the pair's near-term trajectory.

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Spot has moved back closer to one month highs touched yesterday and it would now be interesting to see if momentum is strong enough to lift it beyond 100-day SMA hurdle near 0.7050-55 region. 

With markets already pricing-in an eventual June Fed rate-hike, investors would keenly look for hints over the timing of next rate-hike action. Ahead of the key event risks, traders would confront the release of existing home sale data from the US in order to grab some short-term momentum play.

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Technical levels to watch

Immediate resistance remains at 100-day SMA near 0.7050-55 region, above which a fresh bout of short-covering now seems to lift the pair beyond the 0.7100 handle towards testing the very important 200-day SMA hurdle near 0.7110-15 region.

On the downside, the key 0.70 psychological mark now becomes immediate support to defend, which if broken might trigger a corrective slide towards 0.6950-45 intermediate support en-route the 0.6900 handle.