The NZD/USD pair built on last week's strong recovery move from sub-0.7200 level and jumped to fresh multi-month tops during European session on Tuesday.

A softer tone surrounding the US Treasury bond yields, which failed to extend any immediate support to the US Dollar was seen benefitting higher-yielding currencies and drove the pair to its highest level since Feb. 7, closer to mid-0.7300s. 

Concern over the Fed’s ability to further raise interest rates later during the year, against the backdrop of slowing growth and weakening inflationary pressure, has been a key catalyst behind the recent slide in the US Treasury yields and supportive of the pair's strong up-move back closer to yearly tops touched in February. 

Adding to this, the pair was also being supported by a modest recovery in crude oil prices, which tends to derive demand for commodity-linked currencies.

Meanwhile, possibilities of some stops being triggered on a sustained move beyond the 0.7300 handle might have also collaborated to the pair's sharp up-surge over the past hour or so.

It, however, remains to be seen if the up-move is backed by genuine buying or turns out to be a stop run as investors now look forward to the speeches from influential FOMC members, including the Fed Chair Janet Yellen, for some fresh impetus for the pair's near-term directional move.

   •  USD: Risk of a depreciation - Natixis

Technical levels to watch

A follow through buying interest beyond mid-0.7300s is likely to lift the pair towards yearly tops resistance near 0.7375 region ahead of the 0.7400 handle.

On the downside, retracement back below 0.7310-0.7300 region now seems to find strong buying interest near 0.7275 region, which if broken might trigger a near-term corrective slide.