NZD/USD rebounds from sub-0.7200 level, but seems vulnerable

Despite of the prevailing upbeat investor sentiment the NZD/USD pair remained well offered and is now seen extending its reversal from nearly 14-month high level touched on Tuesday. 

The pair on Tuesday rose to its highest level since May 2015 as global risk-on rally across equity market and a broadly weaker US Dollar was seen boosting demand for riskier assets like commodities and eventually benefitting commodity-linked currencies - like Kiwi.

The pair, however, failed to sustain its strength above 0.7300 handle and is now extending its slide for second consecutive session. The selling pressure further got aggravated after RBNZ unexpectedly announced to issue a brief update on its economic assessment on July 21st. 

Immediately after the announcement the pair dipped below 0.7200 handle but has managed to retrace from lows and is currently trading around 0.7225-30 band.

Moving ahead, traders now turn their attention to the critical BOE monetary policy decision that could provide fresh impetus for global risk sentiment and eventually drive the NZD/USD major. From the US, focus would be on weekly unemployment claims and PPI data.

Technical levels to watch

On a sustained weakness below 0.7200 handle, the pair could be headed back towards 0.7120 intermediate support before aiming levels below 0.7000 psychological mark, towards testing 50-day SMA support near 0.6975-70 region.

On the flip side, 0.7300 handle remains immediate strong resistance to conquer, above which a fresh leg of up-move could lift the pair further beyond 0.7400 handle, towards its next major resistance near 0.7450-60 area.