NZD/USD keeps the red below 0.73 handle

The NZD/USD pair maintained it’s offered tone but has managed to hold around 20-pips above session lows, touched in a knee-jerk reaction of growing political uncertainty.

The outcome of NZ election showed the ruling National Party won the largest number votes in the election, but did not win enough seats to gain a majority in the Parliament. The Prime Minister Bill English would now have to negotiate a coalition with other parties to form a government, which was seen taking a toll on the New-Zealand Dollar. 

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Also collaborating to the downslide was a strong sentiment around the US Dollar, which continued gaining traction through early NA session despite retracing US Treasury bond yields. 

Moving ahead, investors now look forward to this week's RBNZ monetary policy decision for some fresh impetus. Ahead of the key event risk, speeches by influential FOMC members would also influence demand for higher-yielding currencies – like the Kiwi. 

Technical levels to watch

Weakness below mid-0.7200 is likely to find support at 100-day SMA, near the 0.7235 region, below which the pair is likely to accelerate the fall towards the 0.7200 handle en-route 200-day SMA support near the 0.7145 region.

On the flip side, any recovery attempts might now confront fresh supply near the 0.7300 handle, which is closely followed by 50-day SMA hurdle near the 0.7315-20 region. Only a decisive strength above 50-DMA might now negate any near-term bearish outlook for the pair.