NZD/USD retreats from 0.6920 amid recovering US bond yields

The NZD/USD pair trimmed some of its early gains and retreated back below the 0.6900 handle during early NY trading session.

The pair's retracement from higher level, witnessed in the past hour or so, could be attributed to a modest recovery in the US treasury bond yields, which although has failed to extend any immediate support to the greenback but seems to contribute towards driving flows away from higher-yielding currencies - like the Kiwi. 

Meanwhile, the US Dollar continues to be weighed down by the incoming dismal US economic data, with the latest disappointment coming from today's Empire State Manufacturing Index. In fact, the gauge measuring manufacturing activity in the New York-area unexpectedly slipped into contraction territory, coming-in at -1.0 as compared to April's 5.2. 

This was the first negative reading since the US Presidential election and did little to stall the buck's ongoing downslide triggered by Friday's weaker monthly retail sales and inflation data. 

With markets already pricing-in a definite June Fed rate-hike action, fading expectations for additional rate-hikes for the rest of 2017 might now limit any further downslide for the pair amid risk-on environment. 

Technical levels to watch

Immediate support is pegged near 0.6880-75 region, which if broken could accelerate the slide back towards 0.6850-45 intermediate support en-route 10-month lows support near 0.6820-15 region, touched last week. 

On the flip side, bulls would be eyeing for a follow through buying interest beyond 0.6920 level, above which the pair seems all set to extend the recovery move further towards 50-day SMA hurdle near 0.6960-65 region.