NZD/USD retreats from over 1-month tops, back around 0.73 mark

The NZD/USD pair surrendered majority of its early strong gains and has now retreated around 40-pips from over one-month highs. 

The pair failed to build on its bullish break through 50-day SMA hurdle and once again met with some fresh supply near the 0.7340 region, which has been acting as a key hurdle over the past five weeks or so.

The pair's retracement from higher levels could be attributed to a modest pickup in the US Treasury bond yields. Reviving hopes for additional Fed rate hike action by the end of this year extended some support to the US Dollar and weighed on higher-yielding currencies - like the Kiwi.

Moreover, investors also seemed reluctant to place aggressive bets amid uncertainty over the outcome of NZ national election, with the pair holding within one-month old broader trading range. 

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This week's key FOMC decision on Wednesday would also play a key role in determining the next leg of directional move for the major.

In the meantime, broader market risk sentiment and the US bond yield dynamics would remain key determinants of the pair's movement.

Technical levels to watch

On a sustained move above 0.7330-40 hurdle, the pair is likely to dart towards reclaiming the 0.7400 handle with some intermediate resistance near 0.7370 level. 

Meanwhile, on the upside, weakness below 0.7260 level could drag the pair back towards the 0.7210-0.7200 region (100-day SMA) en-route 0.7180-75 horizontal support.