NZD/USD recovers early lost ground, back around 0.6900 handle
• Sliding US bond yields help recover early losses.
• This week’s RBNZ decision holds the key.
The NZD/USD pair has managed to recover majority of its early lost ground and might now be making a fresh attempt to build on the momentum beyond the 0.6900 handle.
Despite a mildly positive US Dollar price action, the prevalent bullish sentiment around commodity space helped limit early losses for the resource-linked New-Zealand Dollar.
Adding to this, a sharp retracement in the US Treasury bond yields extended additional support to higher-yielding currencies and further collaborated to the pair's modest recovery through the European trading session.
It would now be interesting to see if the pair is able to extend the recovery move or enters a consolidation phase amid empty US economic docket and ahead of this week's RBNZ decision, due to be announced during the early Asian session on Thursday.
Technical levels to watch
A follow-through buying interest beyond 0.6910 level has the potential to extend the up-move towards mid-0.6900s (Friday's high) before the pair eventually aims to reclaim the key 0.70 psychological mark.
On the downside, 0.6875 level now seems to act as immediate support, which if broken could drag the pair back towards 0.6835 horizontal support en-route the 0.6800 handle.