After yesterday's corrective dip, the NZD/USD pair regained traction on Tuesday and extended its up-move further beyond the 0.7200 handle.
The latest leg of up-move could be solely attributed to subdued action around the US treasury bond yields that failed to extend any support to the US Dollar but was seen benefitting higher-yielding currencies - like the Kiwi.
Currently placed at the highest level since late Feb., around 0.7225-30 region, it remains to be seen if the pair is able to build on the up-move or runs through fresh supply at higher levels amid firming expectations for an eventual Fed rate-hike action on Wednesday.
Apart from the much awaited FOMC decision, investors this week will also reaction to a slew of macroeconomic releases, including the latest inflation figures, monthly retail sales data from the US, followed by NZ quarterly growth numbers.
Today's US economic docket features the release of PPI print for May and would be looked upon to grab some short-term trading opportunities.
Technical levels to watch
Immediate resistance is pegged near 0.7240-45 area, above which the pair seems all set to aim towards surpassing the 0.7300 handle with some intermediate resistance near 0.7275-80 region.
On the flip side, retracement back below 0.7215-10 area now seems to strong buying interest near 0.7195-90 region, which if broken could drag the pair below 0.7170 level towards testing its next support near 0.7145 area.
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