NZD/USD spikes to session tops, further beyond 0.6300 handle

 
The NZD/USD pair jumped around 30 pips and surged past the 0.6300 handle to refresh session tops in the last hour.
 
Following a brief consolidation during the Asian session, the pair managed to regain some positive traction and was now seen trying to build on the overnight late rebound from two-week lows.

Subdued USD demand supportive

A subdued US Dollar demand, led by weaker sentiment around the US Treasury bond yields amid Fed rate cut expectations, turned out to be one of the key factors extending some support.
 
The latest disappointment from the US retail sales figures reinforced market expectations that the Fed will again cut interest rates at its upcoming monetary policy meeting on October 29-30.
 
Data released on Wednesday showed that the US retail sales fell for the first time in seven months in September and fueled fears that manufacturing-led weakness was spreading to the broader economy.
 
Apart from a modest USD weakness, the pair was further supported by positive trade-related comments from China's Commerce Ministry, saying that we are discussing "Phase 2" of a deal with the US.
 
It will now be interesting to see if the pair is able to capitalize on the positive momentum or meets with some fresh supply at higher levels as traders look forward to second-tier US economic data for a fresh impetus.
 
Thursday's US economic docket features the release of Philly Fed Manufacturing Index and housing market data, which might produce some short-term trading opportunities later during the early North-American session.

Technical levels to watch