NZD/USD hits fresh 2-month lows, back below 0.72 handle

Having posted a session high level of 0.7236, the NZD/USD pair ran through some fresh offers and dropped to fresh two-month lows during early European session. 

Currently hovering around the 0.7200 handle, the pair turned lower for the third consecutive session amid some fresh US Dollar buying interest. A modest pickup in the US Treasury bond yields underpinned the greenback demand and was seen weighing on higher-yielding currencies - like the Kiwi.

Adding to this, the prevalent negative trading sentiment around commodity space further dented demand for commodity-linked currencies and collaborated to the pair's retracement from higher levels. 

Meanwhile, the market seems to have digested today's upbeat NZ trade data, showing an unexpected surplus of NZD 85 million as compared to a deficit of NZD 200 million expected, with the USD recovery acting as an exclusive driver of the pair's offered tone. 

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Next of relevance would be the US economic docket, featuring the release of weekly jobless claims and existing home sales data, which is unlikely to provide any immediate respite for the bulls but would still be looked upon for some short-term trading opportunities. 

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Technical levels to watch

From current levels, immediate support is pegged at 100-day SMA, near the 0.7165 region, below which the pair is likely to slide towards testing the very important 200-day SMA support near 0.7125 level. 

On the upside, 0.7235 level now seems to have emerged as immediate strong resistance, which if cleared might trigger a short-covering bounce towards 0.7275-80 horizontal resistance ahead of the 0.7300 handle.