NZD/USD extends recovery move to 0.69 mark, NFP in focus

Having dropped to fresh 10-month lows in the previous session, the NZD/USD pair staged a goodish recovery and has now moved back closer to the 0.6900 handle.

The pair got an initial boost from the RBNZ's Q2 inflation expectations survey results that showed the prices of goods and services are now expected to change at an annual rate of 2.17%, up from 1.92% expected in the first quarter. The expectations rose to the highest level since Q3 2014 and provided a much needed respite for the New-Zealand Dollar. 

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Adding to this, receding selling pressure in the commodity space and a mild retracement in the US treasury bond yields extended additional supported the pair's recovery move from the lowest level since early June 2016, touched on Thursday.

Investors' attention on Friday will remain glued to the keenly watched NFP data, which if reinforces market expectations of Fed rate-hike action in June could attract some fresh selling pressure around higher-yielding currencies - like the Kiwi.

Technical levels to watch

On a sustained recovery beyond the 0.6900 handle, a bout of short-covering could lift the pair towards 0.6930-35 horizontal resistance ahead of 50-day SMA important hurdle near the 0.6985-90 region. Alternatively, reversal from current level, and a subsequent drop below 0.6875 level, could drag the pair back towards mid-0.6800s, below which the pair is likely to turn vulnerable to break below multi-month lows and aim towards testing the 0.6800 handle.