NZD/USD trims early recovery gains, hangs closer to 4-month lows

The NZD/USD pair struggled to build on early tepid recovery move and has now retreated around 15-20-pip from session tops, just ahead of the 0.7100 handle. 

The pair failed to benefit from the post-NFP US Dollar retracement from multi-week highs and remained within striking distance of 4-month lows support, around the 0.7060-55 region. 

Even a subdued action around the US Treasury bond yields and prevalent positive trading sentiment around commodity space did little to help the pair to register any meaningful recovery.

The NZD was also being weighed down by the US based ratings agency, Fitch ratings' report, which believed that domestic macro-economic risks remain elevated.

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Later during the day, a scheduled speech by Minneapolis Fed President Neel Kashkari might influence the US bond yield dynamics and provide some fresh impetus for higher-yielding currencies - like the Kiwi.

Technical levels to watch

On a sustained break below mid-0.7000s, the pair is likely to accelerate the slide towards the key 0.70 psychological mark with some intermediate support near the 0.7020 region.

Conversely, a strong follow through recovery move beyond the 0.7100 handle might trigger a short-covering bounce back towards the very important 200-day SMA hurdle near the 0.7155 region.