NZD/USD trims recovery gains, awaits Fed minutes for fresh impetus

The NZD/USD pair ran through fresh offers at higher levels and has now reversed majority of its early recovery gains to currently trade around 0.7065-60 band.

The greenback, as measured the overall US Dollar Index, has regained buying interest and has been the sole contributor of the pair's retracement from session peak as investors now await for the release of minutes from FOMC September meeting. 

Increasing odds of an imminent Fed rate-hike decision, with CME group's FedWatch Tool  pointing to 64% probability of a Fed action in December this year, has been the key factor weighing on higher-yielding currencies - like Kiwi and driving the pair lower since the beginning of current trading week. 

Meanwhile, market expectations of further monetary easing by RBNZ at its November meeting could be another reason that could be attributed to the pair's inability to register any meaningful recovery from the lowest level since July 27.

Later during NA trading session, speeches from Federal Reserve Bank of New York President William Dudley and Federal Reserve Bank of Kansas City President Esther George will also be looked upon for clues over the Fed's near-term monetary policy outlook and might provide some impetus for the pair.

Technical levels to watch

From current levels, multi-week lows near 0.7045 area might continue to protect immediate downside below which the pair is likely to turn vulnerable and head towards testing 0.7000 psychological mark.

On the upside, 0.7090-95 area (session high) now becomes immediate resistance, which if cleared seems to assist the pair back towards 100-day SMA resistance near 0.7160 region.