NZD/USD extends overnight recovery from 2-week lows

The NZD/USD pair was seen building on previous session recovery move from over 2-week lows and edged higher through early European session on Friday.

With markets looking past Wednesday's weaker NZ employment details, the pair benefitted from the prevailing bearish sentiment surrounding the greenback. In fact, the key US Dollar Index was hovering around 15-month lows amid growing worries over political turmoil in the US. 

In addition to this, fading expectations of any additional Fed rate hike action by the end of this year, reinforced by Thursday's disappointing ISM non-manufacturing PMI print for July, has been limiting any immediate greenback recovery. 

Hence, the focus would remain on the closely watched NFP report, due for release later during the NA session, which would provide fresh clues on the Fed's near-term monetary policy outlook and eventually help determine the next leg of directional move for higher-yielding currencies - like the Kiwi.

Technical levels to watch

Currently trading around mid-0.7400s, a follow momentum could get extended towards 0.7475 resistance before the pair eventually darts towards reclaiming the key 0.75 psychological mark. On the flip side, weakness back below 0.7430 level could drag the pair back towards retesting the 0.7400 handle.