NZD/USD quickly retreats from over 3-month tops, back around 0.72 mark

The NZD/USD pair gained some fresh traction on Wednesday and finally broke out of its three-day old trading range.

The US Dollar was hammered down across the board after Chinese officials were reported to have made a recommendation to slow down or halt purchases of US Treasuries. This coupled with a sell-off in the fixed income market provided fresh bullish impetus to the major. 

The pair surged to over three-month tops and took along some short-term trading stops placed at the 0.7200 handle, touching an intraday high near the 0.7230 region before quickly retreating around 30-pips from tops. 

It, however, remains to be seen if the up-move was backed by any genuine buying or turns out to be a stop run. Hence, it would be prudent to wait for a follow-through momentum before positioning for any further near-term up-move.

Technical levels to watch

The 0.7175-70 area now seems to act as an immediate support and is followed by support near the 0.7150-40 zone, which if broken could accelerate the slide back towards the very important 200-day SMA support near the 0.7110-0.7100 region. 

On the upside, momentum above 0.7230 level would reaffirm the bullish bias and pave the way for an extension of the pair's upward trajectory initially towards 0.7265-70 hurdle en-route the 0.7300 round figure mark.