NZD/USD drops to fresh session lows, below 0.73 handle

The NZD/USD pair once again met with some fresh supply near the 50-day SMA region and has now dropped back below the 0.7300 handle.

The pair eroded majority of the gains recorded in the previous two trading sessions and today's sharp slide was primarily led by a goodish US Dollar recovery. A modest pickup in the US Treasury bond yields underpinned the greenback demand and has been one of the key factors weighing on higher-yielding currencies - like the Kiwi.

Moreover, traders seemed reluctant to carry bearish USD bets ahead of the key Jackson Hole Symposium, where the Fed Chair Janet Yellen's speech might provide some fresh insights over the central bank's near-term monetary policy outlook. Hence, repositioning trade ahead of the important event risk might have also contributed to the pair's pull-back from 0.7335 heavy supply zone. 

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Meanwhile, the market seems to have largely ignored a mildly positive sentiment around commodity space, which tends to lend support to commodity-linked currencies, including the NZ Dollar.

In absence of any major market moving economic releases from the US, broader market sentiment around the USD would continue to act as an exclusive driver of the pair's movement through Tuesday's trading session.

Technical levels to watch

From current levels, the pair is likely to find immediate support near 0.7280 level, below which the fall is likely to get extended towards 0.7230 horizontal support en-route the 0.7200 handle. On the flip side, momentum above 0.7310-15 area might continue to confront strong resistance near the 0.7335 region, which if cleared might trigger a short-covering rally towards 0.7370 level before the pair eventually darts towards reclaiming the 0.7400 handle.