NZD/USD aiming to reclaim 0.7100 handle

The NZD/USD pair extended Friday's recovery momentum back above the very important 200-day SMA and has now moved within striking distance of 0.7100 handle.

Currently trading around 0.7090-95 band, the pair remained on firm footing for the second consecutive day amid improving investor risk-appetite, as depicted by recovery in Asian equity markets. Moreover, a broad based US Dollar retracement is further supporting upbeat sentiment surrounding commodities and providing an additional boost to commodity-linked currencies, including the New-Zealand Dollar. 

Going ahead, the broader sentiment surrounding risk-associated space would be a key driver for riskier / higher-yielding currencies - like the Kiwi, ahead of this week's key US macro releases - GDP print and NFP data, and RBNZ's Financial Stability Report during early Asian session on Wednesday.

Technical levels to watch

A follow through buying interest above 0.7100 handle is likely to lift the pair immediately towards 0.7120 en-route 0.7140 strong horizontal resistance. On the downside, 0.7060 area now becomes immediate support to defend, which if broken could accelerate the slide towards 200-day SMA support near 0.7035 region. A convincing break back below 200-day SMA support might now negate any near-term bullish bias and turn the pair vulnerable to break through 0.70 psychological mark and aim towards retesting recent multi-month lows support near 0.6970 area.