NZD/USD erases RBNZ-led gains, drops back to 0.7200

The NZD/USD pair reversed all of its RBNZ-led gains to nearly 15-month high level and has now dropped back to 0.7200 handle.

The pair remained under pressure despite of better-than-expected New-Zealand quarterly retail sales data. According to the Statistics New Zealand report, released during early Asian session on Friday, New-Zealand retail sales rose sharply and posted a growth of 2.3% in the second quarter following a 0.8% expansion in the first three months of the year. 

The pair, however, failed to benefit from stronger-than-expected data as weaker Chinese economic data is weighing on commodity-linked currencies - like the Kiwi. 

Next in focus would be US macro releases, namely - monthly retail sales, PPI and consumer sentiment data, that would assist investors to determine the pair's near-term trajectory.

Technical levels to watch

On a sustained weakness below 0.7200 handle, the pair seems to immediately head towards 0.7170-65 horizontal support, below which the momentum could drag the pair further towards 0.7135 strong support. A follow through selling pressure below 0.7135 would now turn the pair vulnerable to continue drifting lower in the near-term.

Meanwhile on the upside, 0.7240 remains immediate strong support to watch for. Only a sustained strength and close above this important support might negate any near-term bearish bias and lift the pair back above 0.7300 handle, towards retesting RBNZ-led swing high resistance near 0.7340 region.