NZD/USD erases early gains, drops back to 0.7250

The NZD/USD pair faded positive economic data-led bullish spike beyond 0.7300 handle and turned back lower to currently trade back around mid-0.7200s. 

New-Zealand data released on Wednesday showed unemployment rate dropping to 5.1% and PPI rose 0.9% q-o-q versus expected 0.5% rise. The pair, however, failed to build on to early gains since rise in employment was primarily led by change in methodology. 

Moreover, deflationary environment continues to fuel speculations of further monetary easing by RBNZ and restricted further appreciation of the Kiwi. The pair quickly erased all of its early gains and dropped back into negative territory as markets now look forward to FOMC meeting minutes, later during NY trading session, which would determine the near-term trajectory for the greenback and eventually drive the major in the near-term.

Technical levels to watch

From current levels, sustained weakness back below 0.7240 immediate support seems to drag the pair back towards 0.7200 handle, below which the pair would negate possibilities of any further up-move and continue drifting lower initially towards 0.7165-60 support and eventually towards 0.7125-20 strong support.

On the flip side, bullish momentum back above 0.7275-80 zone seems to boost the pair back above 0.7300 handle, towards testing RBNZ-led swing high resistance near 0.7340 area. A follow through buying interest should pave way for continuation of the pair's near-term upward trajectory.