A broadly weaker USD lifts NZD/USD to 0.7250

A broad based sell-off in the US Dollar assisted the NZD/USD pair to extend its recovery from Monday's sub-0.7200 level and jump to a 3-day high to currently trade around mid-0.7200s.

Following last week's sharp reversal from RBNZ-led bullish spike to the highest level since May 2015, the pair on Monday dropped to 0.7165 before rebounding sharply as recent disappointing US economic data underpinned expectations that the Federal Reserve is unlikely to raise interest rates in 2016.

Focus now shifts to today's CPI print from the US, later during NA session that would further influence Fed's monetary policy outlook ahead of Global Dairy Trade (GDT) price index and labor market reports from New-Zealand during early Asian session on Wednesday.

Technical levels to watch

On a sustained move above 0.7255-60 region, the pair seems all set to extend its bullish traction towards last week's swing high resistance near 0.7340. A follow through buying interest would pave way for continuation of the pair's upward trajectory in the near-term.

On the flip side, 0.7210-0.7200 round figure mark now seems to protect immediate downside, which if broken would negate possibilities of any further bullish momentum and drag the pair back towards 0.7165-60 intermediate support before the pair makes a dart towards testing its next major support near 0.7100-0.7090 region.