NZD/USD inching closer to Tuesday’s multi-month highs

Having posted a session low at 0.7269, the NZD/USD pair recovered all of its lost ground and is now building on to its gains beyond 0.7300 handle to currently trade around 0.7325 region.

During early Asian session on Wednesday, the pair broke below 0.7300 handle as Tuesday's stronger-than-expected new home sales data from the US was helping the greenback to extend its recovery. Adding to this, a higher-than-expected New-Zealand trade deficit data released on Wednesday was weighing on the Kiwi. 

The pair, however, shrugged-off negative reaction and regained Tuesday's lost traction, led by hawkish comments from RBNZ Governor Wheeler. Traders now await for the release of existing home sales data from the US for further direction ahead of the much awaited speech from the Fed Chair Janet Yellen at the Jackson Hole Symposium.

Technical levels to watch

From current levels, 0.7340-50 area remains immediate hurdle, which if cleared should pave way for continuation of the pair's near-term upward trajectory initially towards 0.7395 (May 22, 2015 high) en-route its next major resistance near 0.7450-60 region.

On the flip side, 0.7300-0.7290 area now seems to protect immediate downside and is followed by strong support near 0.7270. A convincing break below 0.7270 support would negate possibilities of any further up-move and turn the pair vulnerable to drop below 0.7250 horizontal support, towards testing 0.7210-0.7200 important support.