NZD/USD lacking follow through momentum above 0.7200 handle

The NZD/USD pair once again failed to sustain its strength above 0.7200 handle and retraced around 20-30 pips from session tops.

Currently trading around 0.7190-95 region, the pair held its neck above 100-day SMA amid persistent selling pressure surrounding the buck as investors continue to taper their expectations of aggressive fiscal stimulus measures by the new administration following Donald Trump's inaugural speech on Friday. Lack of details over Trump's economic policies triggered a sharp retracement in the US treasury bond yields and eventually was seen benefitting higher-yielding currencies - like the Kiwi.

However, a mild bounce-back in bond yields swung the pendulum mildly in favor of the greenback, with the key US Dollar Index consolidating its slide to 6-week lows, and contributing towards restricting the pair’s up-move just below over two-month high touched on Friday. 

In absence of any fresh fundamental driver from the US economic docket, the pair remains at the mercy of the greenback and bond yields price-dynamics.

Technical levels to watch

A follow through retracement below 0.7165 level now seems to find support near 100-day SMA near 0.7150 region, which if broken might accelerate the slide towards the very important 200-day SMA support near 0.7100-0.7095 region. 

On the flip side, 0.7220-25 region remains immediate strong hurdle, which if cleared decisively has the potential to lift the pair towards 0.7275-80 resistance, en-route 0.7300 round figure mark.