NZD/USD fails ahead of 0.73 handle

The NZD/USD pair reversed its early dip to 0.7225 level and touched fresh session tops in the last hour, albeit quickly retreated few pips thereafter.

Currently trading around 0.7270 level, off around 25-pips from session tops, the pair's up-move back closer to the 0.7300 handle was not backed by any catalyst and hence, lacked any follow through traction amid goodish US Dollar recovery.

Moreover, a strong uptick in the US Treasury bond yields further collaborated towards keeping a lid on any additional up-move for higher-yielding currencies - like the Kiwi.

Meanwhile, the market seems to have digested the downward revision of NZ inflation forecasts for 2017/18 by the New Zealand Institute of Economic Research (NZIER), with the prevalent positive sentiment around commodity space extending some support to commodity-linked currencies, including the NZ Dollar. 

In absence of any fundamental driver, in terms of any major market moving economic releases from the US, the pair remains at the mercy of US bond yield dynamics.

   •  NZD/USD needs to clear 0.7340 to look convincing in a bullish sense – Westpac

Technical levels to watch

A follow through retracement back below mid-0.7200s now seems to drag the pair below session lows support near 0.7225 level towards testing the 0.7200 handle. 

On the upside, momentum back above 0.7285 level now seems to lift the pair beyond the 0.7300 round figure mark back towards heavy supply zone near the 0.7330-35 region.