NZD/USD slips below 0.73 handle, hits fresh session lows

Having posted a session high level of 0.7330, the NZD/USD pair ran through some fresh offers and eroded part of Friday's dismal US CPI-led gains. 

Currently flirting with daily lows near the 0.7300-0.7295 region, the pair's retracement of around 30-35 pips over the past hour or so could be solely attributed to a pickup in US Dollar demand. 

With investors looking past Friday's softer US inflation figures, a strong recovery in the US Treasury bond yields underpinned the greenback demand and drove flows away from higher-yielding currencies - like the Kiwi.

The pair was also being weighed down by today's downbeat Chinese macro data, which contributed to a mildly softer tone around commodity space and was seen denting demand for commodity-linked currencies, including the NZ Dollar. 

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From a technical perspective, reemergence of selling interest at higher levels reinforces last week's bearish break below 50-day SMA support. Hence, an extension of the pair's near-term downward trajectory, even below near one-month lows support near mid-0.7200s, now seems a distinct possibility. 

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Technical levels to watch

Immediate support is pegged near 0.7270 level, which is closely followed by 0.7250 support area. A convincing break below the mentioned supports would turn the pair vulnerable to retest the 0.7200 handle before eventually dropping to 100-day SMA support near the 0.7145 region.

On the upside, 50-day SMA, near the 0.7315-20 region, remains immediate strong supply zone, above which a bout of short-covering could lift the pair beyond post-RBNZ swing highs resistance near 0.7370-75 zone towards reclaiming the 0.7400 handle.