NZD/USD sits at session tops, around 0.73 handle ahead of US data
|After Monday’s sharp pull-back from near 6-week tops, the NZD/USD pair regained positive traction and is currently placed at session tops around the 0.7300 handle.
A fresh wave of US Dollar selling bias, backed by a modest retracement in the US Treasury bond yields was seen benefitting higher-yielding currencies - like the Kiwi. Adding to this, the prevalent positive trading sentiment around commodity-space remained supportive of the bid tone surrounding commodity-linked currencies, including the NZ Dollar.
It, however, remains to be seen if the momentum is strong enough to lift the pair beyond an important supply zone near the 0.7335-40 region, which has been capping the pair's up-move since August 11.
Looking at the broader picture, the pair has been oscillating within a broader trading range between 50-day SMA hurdle and 100-day SMA support over the past two weeks. Hence, it would be prudent to wait for a decisive break through the mentioned band before positioning for the next leg of directional move, amid uncertainty over the outcome of NZ national election.
• NZD/USD capped by election uncertainty - Westpac
Today's US economic docket features the release of housing market data, current account numbers and export/import price index, would be looked upon for short-term trading impetus ahead of the key event risk - FOMC monetary policy decision on Wednesday.
Technical levels to watch
Momentum above the 0.73 handle might find some resistance at 50-day SMA around 0.7315 level. The key hurdle, however, remains near the 0.7335-40 region, above which the pair is likely to rally towards 0.7370 level en-route the 0.7400 handle.
On the flip side, any retracement back below 0.7275 level might continue to find some support near mid-0.7200s, which if broken could drag the pair towards the 0.7210-0.7200 region (100-day SMA)ahead of the very important 200-day SMA support near 0.7140-35 zone.
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