NZD/USD surrenders early strong gains to 26-month highs

The NZD/USD pair surrendered majority of its early strong gains to the highest level since May 2015 and retreated around 35 pips from session tops.

The pair surged through the key 0.7500 psychological mark on Wednesday and extended the bullish trajectory earlier today amid broad based US Dollar sell-off following the release of less hawkish FOMC statement. 

The pair, however, seems to have lost its upside momentum and the pull-back from higher levels could be attributed to a goodish greenback recovery. A modest pickup in the US Treasury bond yields was seen extending some support to the buck and drove flows away from higher-yielding currencies - like the Kiwi.

Moreover, the prevalent cautious environment, as depicted by a mildly weaker trading sentiment around European equity markets further benefitted the greenback's safe-haven demand, against its NZ counterpart, and collaborated to the pair's retracement to the lower end of the daily trading range, around the 0.7525-20 region.

Later during early NA session, the US economic data - durable goods orders, goods trade balance data and weekly jobless claims, would now be looked upon for some fresh trading impetus.

Technical levels to watch

Immediate support is now seen at the 0.75 handle, below which traders might be prompted to take some profits off the table and could drag the pair towards 0.7460-55 horizontal support en-route 0.7415-10 area.

On the flip side, mid-0.7500s now seems to have emerged as immediate resistance, which if cleared now seems to pave way for continuation of the pair's near-term appreciating move towards reclaiming the 0.7600 handle ahead of 0.7625-30 horizontal resistance.