NZD/USD erases early losses, turns back above 0.7100 level

A fresh wave of risk-on trade is seen helping the NZD/USD pair to extend its recovery trend and to move back back above 0.7100 handle. The pair, however, has retraced few pips from session high level of 0.7120 and is currently trading absolutely flat around 0.7110 level.

Earlier on Thursday, the pair dropped close to 0.7050 as post-Brexit political uncertainty in the UK was seen weighing on investor sentiment. The pair fell despite of an improvement in ANZ Business Confidence index for June that reflected the highest level of optimism since Dec. 2015. 

However, a broadly weaker US Dollar on diminishing prospects of an eventual Fed rate-hike, at-least until September, and receding Brexit fears now seems to boost riskier assets and high-yielding currencies - like the New-Zealand Dollar. 

Going forward, the pair is likely to take cues from risk sentiment drive by further developments surrounding last week's historic Brexit referendum and couple of economic releases from the US later during NA session. US releases includes - weekly jobless claims and Chicago PMI.

Technical levels to watch

From current levels, momentum above 0.7120 is likely to get extended towards 0.7150 horizontal resistance, above which the pair seems all set to reclaim 0.7200 handle and head towards retesting June closing highs resistance around 0.7245-50 region. Meanwhile on the downside, 0.7060-50 area might continue to provide immediate support. Failure to hold this immediate support might turn the pair vulnerable to extend its slide below Brexit-led swing lows support around 0.7000 psychological mark and aim towards 50-day SMA support near 0.6915-10 region.