NZD/USD retreats from high, back below 0.7300 handle

The NZD/USD pair failed to sustain its momentum at higher level and has now retraced nearly 40-pips from session high to currently trade back below 0.7300 handle. 

A sudden turnaround in market sentiment, as depicted by a fresh bout of selling pressure in European equity markets, is denting demand for riskier assets and higher yielding currencies - like the kiwi. The pair, however, has held on to its tepid recovery and traded with positive bias for the second straight session.

Meanwhile, increasing prospects of further interest rate cut by RBNZ at its meeting in November also seems to have restricted further up-move and the current bounce might have been utilized by investors to initiate positional bearish bets.

Next on tap would be the US economic releases that include - the S&P/Case-Shiller index, the CB’s Consumer Confidence and Market Services PMI, ahead of a speech from Federal Reserve Vice Chairman Stanley Fischer.

Technical levels to watch

Immediate downside support is pegged near 0.7250 region (session low), which if broken should accelerate the slide towards 50-day SMA support near 0.7230 region. On the upside, momentum back above 0.7315-20 resistance should now assist the pair towards 0.7350 strong horizontal resistance.