• NZD boosted by RBNZ’s inflation expectations report.
• Up-move further supported by weaker US bond yields/USD.
• US CPI/retail sales data eyed for fresh directional impetus.
The NZD/USD pair held on its positive bias for the fourth consecutive session and jumped to a one-week high level of 0.7335 during the Asian session on Wednesday.
The pair built on its recent recovery move from sub-0.7200 level, touched last Thursday and surged through the 0.7300 handle following the release of RBNZ's Inflation Expectations report that showed New Zealand's annual inflation expectations over a two-year horizon rose to 2.11% from 2.02% in the previous survey.
Adding to this, a softer tone around the US Treasury bond yields was further seen exerting downward pressure on the US Dollar and remained supportive of the pair's strong up-move closer to 0.7340 supply zone.
The up-move now seems to have lost steam, with the retreating around 25-pips from session tops amid some profit-taking as investors now look forward to the US macro data for some fresh impetus.
Today's US economic docket features the release of consumer inflation figures, which along with monthly retail sales data might influence March Fed rate hike expectations and eventually provide some directional impetus for higher-yielding currencies - like the Kiwi.
Technical levels to watch
A clear breakthrough 0.7340 immediate resistance now seems to assist the pair to make a fresh attempt towards conquering the 0.7400 handle. On the flip side, any meaningful retracement below the 0.7300 handle is likely to find support near the 0.7270 region, which if broken could accelerate the fall back towards the 0.7220-15 region.
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