NZD/USD flirting with lows, below 0.73 handle ahead of US data/Powell’s testimony

   •  Weighed down by a modest uptick in the US bond yields.
   •  US macro data/Powell’s testimony holds the key.

The NZD/USD pair extended overnight sharp retracement slide and traded with a negative bias, below the 0.7300 handle, through the mid-European session.

After yesterday's attempted recovery move, which was sold into, the pair struggled to gain any fresh traction and failed to benefit from today's lower-than-expected trade deficit figures for the month of January. 

Even a subdued US Dollar price-action did little to lend any support, with a modest uptick in the US Treasury bond yields eerting some downward pressure around higher-yielding currencies - like the Kiwi.

It would now be interesting to see if bears are able to maintain their dominant position and continue dragging the pair further towards 50-day SMA support as the focus remains on the Fed Chair Jerome Powell's first congressional testimony before the House Financial Services Committee. 

Also in focus would be the US economic docket, featuring the release of durable goods orders and CB's consumer confidence index, which might influence the USD price dynamics and provide some short-term trading opportunities.

Technical levels to watch

A follow-through weakness is likely to find support near the 0.7240-35 region (50-day SMA), below which the pair is likely to head towards testing the 0.7200 handle en-route the very important 200-day SMA support near the 0.7175-70 region.

On the upside, any meaningful recovery beyond the 0.7300 handle might continue to confront some fresh supply near the 0.7335-40 region, which if cleared might trigger a short-covering rally back towards reclaiming the 0.7400 handle.