NZD/USD inches back closer to 0.6725-30 supply zone
- The USD fails to capitalize on the overnight upswing amid sliding US bond yields.
- Tempered expectations for aggressive policy easing by the Fed might cap gains.
- Wednesday’s US housing market data eye for some short-term trading impetus.
The NZD/USD pair regained positive traction on Wednesday and recovered the previous session's retracement slide from three-month tops.
Resurgent US Dollar demand, which got an additional boost following the release of upbeat June US retail sales figures, prompted some long-unwinding trade on Tuesday and turned out to be one of the key factors behind the pair's intraday pullback.
The downtick, however, turned out to be short-lived in the wake of absent follow-through USD buying interest. Renewed weakness in the US Treasury bond yields kept the USD bulls on the defensive and assisted the pair to catch some fresh bids on Wednesday.
The up-move - marking the fifth day of a positive move in the previous six, has now lifted the pair back closer to the 0.6725-30 supply zone, which if cleared will set the stage for a further near-term appreciating move, though tempered expectations for an aggressive policy easing by the Fed might cap gains.
Moving ahead, Wednesday's US housing market data - building permits and housing starts, due for release later during the early North-American session, will now be looked upon for a fresh impetus and in order to grab some short-term trading opportunities.
Technical levels to watch