NZD/USD recovers early lost ground, eyeing a move back above 0.73 handle

The NZD/USD pair recovered early lost ground to the 0.7260 region and is now eyeing a move back above the 0.7300 handle. 

The pair's latest leg of up-move over the past couple of hours could be attributed to a mild weakness around the US Treasury bond yields, which was seen benefitting higher-yielding currencies - like the Kiwi.

This coupled with a modest US Dollar pull-back on the back of N. Korea's latest threat in reaction to the new sanctions imposed by the UN, that it would accelerate the plans to acquire a nuclear weapon further collaborated to the pair's up-move through mid-Asian session.

It, however, remains to be seen if bulls remain in control and lift the pair beyond 50-day SMA strong supply zone near the 0.7320-30 region, which has been acting as a strong barrier since mid-August. 

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Later today, the latest US inflation figures would influence Fed rate hike expectations and eventually provide some fresh impetus for the pair's next leg of directional move.

Technical levels to watch

Immediate resistance remains at 0.7320-30 area, above which a bout of short-covering is likely to accelerate the up-move towards 0.7370-75 intermediate resistance ahead of the 0.7400 handle.

On the flip side, the 0.7260-55 region might continue to protect immediate downside, which if broken might turn the pair vulnerable to test 100-day SMA support near the 0.7200 handle before eventually dropping to its next support near 0.7170 horizontal level.