NZD/USD struggles to sustain up-move beyond 0.6900 handle

The NZD/USD pair extended last week's recovery move from 10-month lows and traded with positive bias for the third consecutive session, albeit has retreated around 20-pips to currently trade around 0.6885 region.

The pair continues to benefit from persistent bearish sentiment surrounding the US Dollar, always backed by the incoming dismal US economic data. Adding to this, recent gains in commodity prices further collaborated to the pair's recovery move from the lowest level since June 2016, touched last Thursday. 

Bulls, however, seemed lacking conviction, with the pair struggling to sustain its strength beyond the 0.6900 handle. Reemergence of some selling pressure at higher levels clearly seems to suggest that the pair could be still far from forming a near-term bottom and remains vulnerable to extend its near-term bearish slide. 

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Later during the day, outcome of the latest dairy auction, GDT price index, would influence sentiment surrounding the New-Zealand Dollar and provide some fresh impetus for the pair's near-term trajectory. Also in focus would be the US economic docket, featuring the release of housing market and industrial production data.

Technical levels to watch

A follow through retracement below 0.6870-65 horizontal support has the potential to drag the pair back towards 0.6845-40 support area, below which a fresh leg of weakness is likely to drag the pair towards the 0.6800 handle ahead of its next major support near 0.6775 level. 

On the flip side, sustained move beyond the 0.6900 handle, leading to a subsequent break through 0.6915-20 resistance (yesterday's high), should continue lifting the pair further towards 50-day SMA important hurdle near 0.6960 region.