NZD/USD holds comfortably above 0.7100 handle, closer to 2-1/2 month tops

   •  Chinese data triggers the initial leg of up-move.
   •  Renewed USD weakness provides an additional boost.
   •  Rising US bond yields to cap gains ahead of ADP report.

The NZD/USD pair caught some fresh bids on Thursday and spiked back closer to 2-1/2 month highs, touched earlier this week.

The pair found decent support ahead of 100-day SMA and jumped back above the 0.7100 handle following today's release of upbeat Chinese Caixin Services PMI print for December. Adding to this, the prevailing positive sentiment around commodity space provided an additional boost to the pair's up-move. 

Meanwhile, the US Dollar recovery move lacked any follow-through traction, despite a hawkish assessment of the latest FOMC meeting minutes, and remained supportive of the pair's strong up-move through the European session.

It, however, remains to be seen if the pair is able to build on the momentum or once again fails to sustain its strength above the very important 200-day SMA amid a fresh wave of an upsurge in the US Treasury bond yields, which tends to undermine the demand for higher-yielding currencies - like the Kiwi.

Focus now shifts to the US economic docket, featuring the release of ADP report on private sector employment and the usual initial weekly jobless claims, which would now be looked upon for some fresh trading impetus later during the early NA session.

Technical levels to watch

A follow-through buying interest has the potential to continue lifting the pair towards 0.7165-70 supply zone ahead of the 0.7200 handle. On the flip side, the 0.7100 region (200-DMA) now becomes an immediate support, which if broken could drag the pair back towards the 0.7075-65 region (100-DMA).