NZD/USD sticks to RBNZ-led strong gains

Haresh Menghani FXStreet

The NZD/USD pair held on to hawkish RBNZ-led strong gains but lacked any strong follow through momentum and retreated around 20-pips from session tops.

The pair rallied hard on upbeat economic assessment by the RBNZ, shrugging off the latest weaker economic growth numbers. The central bank kept interest rates steady at record lows and also downplayed the recent rise in the domestic currency.

• RBNZ: Staunchly Neutral – TDS

The pair, however, failed to build on the bullish spike and has now retreated closer to mid-0.7200s in wake of a modest pick-up in the greenback demand, with the key US Dollar Index recovering all of its early lost ground.

Meanwhile, a softer tone surrounding the US Treasury bond yields, amid fading expectations for additional Fed rate-hike move in 2017 on concerns over easing inflationary pressure led by the ongoing slump in oil prices, remained supportive of the strong bid tone surrounding the major.

Later during the NA session, second-tier US economic data - weekly jobless claims and CB leading index, along with Federal Reserve Governor Jerome Powell's testimony would now be looked upon for some fresh impetus.

Technical levels to watch

From current levels, retracement back below 0.7240-35 region now seems to find some support near 0.7215 level ahead of the 0.7200 handle. On the upside, sustained momentum above 0.7270-75 region now seems to lift the pair back above the 0.7300 handle towards retesting over 4-month highs resistance near 0.7320 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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