NZD/USD surges to 3-week high after US data

A fresh bout of US Dollar selling pressure assisted the NZD/USD pair to build on to its gains above 0.7200 handle and jump to a fresh 3-week high to currently trade around 0.7240 region.

After struggling to build on to its gains above 0.7200 handle, mostly in-line with expected US economic releases trigger a short-covering rally that lifted the pair close to mid-0.7200s. 

US Dollar weakness has been the key theme after last week's FOMC statement that was deemed as dovish by market participants. Adding to it, disappointing US GDP growth further diminished prospects of an eventual Fed rate-hike action in 2016 and has been driving the greenback lower across the board.

Meanwhile, the kiwi has been gaining traction after data released on Tuesday showed New-Zealand inflation expectations ticking higher for the second quarter of 2016 and added on to the buying interest around the NZD/USD major.

Technical levels to watch

On a sustained move above 0.7250 resistance, the pair seems to extend its upward trajectory immediately towards July daily closing highs resistance near 0.7300 handle. A decisive move above 0.7300 mark now seems to pave way for continuation of the pair's appreciating move in the near-term.

On the flip side, 0.7200 handle now seems to provide immediate support, below which Monday's low support near 0.7170-65 region comes into play. A decisive break back below 0.7170-65 support might now negate near-term bullish bias and turn the pair vulnerable to further downslide in the near-term.