NZD/USD hits 2-1/2 week tops, beyond 0.73 handle

The NZD/USD pair continued gaining strong traction through Asian session on Friday and has now jumped to 2-1/2 week tops, above the 0.7300 handle.

The pair's latest leg of sharp spike of around 50-pips over the past hour or so could be attributed to Chinese trade balance data, showing healthy imports growth of 13.3% on yearly basis. Although the headline surplus figure missed estimates, upbeat imports data remained supportive of the prevalent strong bid tone surrounding the major.

Meanwhile, a broad based greenback sell-off, with the key US Dollar Index sinking to 33-month lows amid sliding US Treasury bond yields, provided an additional boost to higher-yielding currencies and further collaborated to the pair's strong up-move to the highest level since August 22.

It would now be interesting to see if the bulls are able to maintain their dominant position and help the pair to decisively break through 50-day SMA strong hurdle, currently near the 0.7320 area. 

Technical levels to watch

A clear break through 50-day SMA barrier near the 0.7315-20 region has the potential to continue lifting the pair towards 0.7370-75 area (August 10 high), above which the pair is likely to aim towards reclaiming the 0.7400 handle.

On the flip side, any retracement back below the 0.7300 handle might now find immediate support near 0.7280 level, which if broken might drag the pair back towards 0.7235 strong horizontal support ahead of 100-day SMA support near the 0.7200-0.7190 region.