NZD/USD recovers lost ground, but struggling for a firm direction

Having posted a session low at 0.7170 level, the NZD/USD pair managed to recover lost ground and is now headed to the top end of daily trading range.

Currently trading around 0.7185 region, the pair reversed early losses to 3-day low amid subdued US Dollar price-action as investors seemed reluctant to initiate any fresh trading position amid holiday-thinned liquidity conditions. The US markets would remain closed on Monday due to the national holiday for Presidents Day.

Meanwhile, improving investor appetite for riskier assets, as depicted by positive trading sentiment surrounding commodity space and further reinforced by upbeat European equity markets, extended support to the higher-yielding currencies - like the Kiwi.  

The pair's movement, however, lacked conviction as market participants prefer to adopt a wait and watch policy ahead of this week's key event risk - the FOMC meeting minutes on Wednesday, which would help investors evaluate possibilities and timing of the next Fed rate-hike action and eventually determine the pair's next leg of directional move.

Also in focus would be the release of GDT Price Index on Tuesday, which might also provide some impetus for short-term traders.

Technical levels to watch

Immediate upside resistance is pegged at 0.7200 round figure mark above which the pair could head back towards 0.7240 resistance with 0.7220-25 providing some intermediate resistance. 

On the flip side, sustained weakness below session low support near 0.7170 region would reaffirm near-term bearish bias and expose a break below the very important 200-day SMA support near 0.7130 region ahead of 0.7100 round figure mark.