NZD/USD retreats from multi-month highs, flirting with lows near 0.7300 handle

Having retested multi-month highs, the NZD/USD pair came under some selling pressure and has now moved back closer to the 0.7300 handle. 

The pair failed to benefit from today's upbeat Chinese Caixin Manufacturing PMI and once again ran through some fresh offers near the 0.7345 area, the highest level since early Feb. A modest US Dollar recovery, led by a continuous upsurge in the US Treasury bond yields might have prompted traders to take some profits off higher-yielding currencies - like the Kiwi.

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Adding to this, a mildly weaker tone around commodity space was also seen weighing on commodity-linked currency and further collaborated to the pair's corrective slide at the start of a new trading week. 

Next in focus would be the release of US ISM manufacturing PMI, due later during early NA session. In the meantime, broader market risk sentiment and the US bond yield dynamics would continue to act as key determinants of the pair's movement through European trading session.

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Technical levels to watch

On a sustained break below the 0.73 handle, the pair is likely to extend the corrective slide towards 0.7270-65 horizontal support before eventually aiming to retest the 0.7200 round figure mark.

Conversely, a decisive move above 0.7330-35 region, leading to a subsequent breakthrough multi-month highs resistance, has the potential to continue lifting the pair further towards yearly tops resistance near 0.7375 region.