NZD/USD slides closer to weekly lows on surging bond yields

The NZD/USD pair remained under some selling pressure through the mid-European session and has now weakened back closer to one-week lows touched in the previous session.

The pair continues to face some fresh supply near the 0.7300 handle and the latest leg of slide over the past hour or so could be attributed to a blowout rally in bond yields, which was seen driving flows away from higher-yielding currencies - like the Kiwi.

Meanwhile, traders seemed to have largely ignored the US Dollar weakness, with bond yield dynamics acting as an exclusive driver of the pair's movement on Thursday. Even the prevalent positive trading sentiment around commodity space did little to extend any support and stall the pair's slide to session lows near 0.7260-65 region. 

Next in focus would be the release of ADP report on the US private sector employment, which would influence market expectations for Friday's official jobs report (NFP) and provide some fresh impetus during early NA session.

Apart from the ADP report, today's US economic docket also features the release of trade balance data and ISM non-manufacturing PMI, which would be looked upon to grab some short-term trading opportunities.

   •  US: ISM Non-manufacturing and ADP employment in focus - TDS

Technical levels to watch

On a sustained weakness below mid-0.7200s, the pair is likely to accelerate the fall towards 0.7220 intermediate support en-route the 0.7200 round figure mark. On the upside, the 0.7300 handle remains an immediate strong hurdle, which if conquered could trigger a short-covering rally back towards 0.7330 recent daily closing highs resistance ahead of multi-month highs resistance near 0.7345-50 region.