NZD/USD fails to clear 0.7340 barrier despite better trade data

The NZD/USD pair once again failed to move past 0.7340 important supply zone and has now surrendered all of its early gains led by better-than-expected current account figures.

The pair got an early boost after New Zealand reported its current account balance data, which highlighted narrowing trade deficit during the second quarter of 2017. The up-move, however, turned out to be short-lived and the pair has now retreated back closer to the 0.7300 handle.

Meanwhile, the market seems to have digested an uptick in the NZ GDT price index, released overnight, with the pair failing to benefit from a mildly weaker tone around the US Dollar. 

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Even a modest retracement in the US Treasury bond yields did little to lend any support to higher-yielding currencies - like the Kiwi as focus remains on the much awaited FOMC decision, due to announced later during the NY trading session.

Ahead of the key event risk, the release of existing home sales data from the US is likely to be overshadowed by pre-Fed repositioning trade.

Technical levels to watch

A follow through retracement below 0.7300-0.7290 area could drag the pair back towards mid-0.7200s en-route 100-day SMA support near the 0.7220 region. On the upside, 0.7335-40 zone remains immediate strong hurdle, which if conquered might trigger a short-covering rally towards 0.7370 level ahead of the 0.7400 handle.