NZD/USD flirting with fresh 2-month lows near 0.69 handle

The NZD/USD pair extended its strong downside momentum and dipped below the 0.6900 handle for the first time since early Jan. 

Spot remained under selling for the seventh consecutive session amid surging US treasury bond yields. The sell-off in treasuries aggravated on Wednesday after blowout ADP number boosted Fed rate-hike expectations at next week's meeting. 

Against the backdrop of disappointing outcome of the latest dairy action on Tuesday, the ongoing bullish trajectory in the bond yields continued driving flows away from higher-yielding currencies - like the Kiwi. 

With the only scheduled release of usual weekly jobless claims data from the US economic docket on Thursday, investors' attention would remain glued to Friday's keenly watched NFP data.

Technically, the pair is inching closer to yearly lows support near 0.6885 level and hence, a follow through weakness below the said support would open room for continuation of the pair near-term bearish slide. 

Technical levels to watch

Slide below 0.6885 immediate support is likely to get extended towards Dec. lows support near 0.6860 region, which if broken would turn the pair vulnerable to break below the 0.6800 handle and head towards testing its next major support near 0.6780-75 zone.

On the upside, recovery beyond session peak resistance near 0.6915-20 region has the potential to lift the pair towards 0.6955 horizontal level ahead of 0.6975-80 strong hurdle.