NZD/USD extends overnight recovery move from 3-week lows

   •  Trump’s new tariffs derail USD up-move. 
   •  Traders shrugged off a pickup in US bond yields.

The NZD/USD pair continued gaining positive traction through the early European session and was seen building on overnight sharp rebound from 3-week lows.

Currently trading around 0.7265 area, back above 50-day SMA, the pair recovered around 90-pips from previous session's swing lows and was supported by some renewed US Dollar selling bias. 

The US President Donald Trump's protectionist stance, announcing to impose steep tariffs on imported steel and aluminium, derailed the greenback's week-long bullish move and was seen as one of the key factors driving the pair higher. 

Traders seem to have largely ignored a goodish pickup in the US Treasury bond yields, which tends to drive flows away from higher-yielding currencies - like the Kiwi, with the USD price dynamics acting as an exclusive driver of the pair's momentum on the last trading day of the week. 

With the only scheduled release of Revised UoM Consumer Sentiment, the US economic docket lacks any major market-moving economic data and hence, a follow-through recovery, led by some additional short-covering move, now looks a distinct possibility.

Technical levels to watch

A follow-through buying interest has the potential to continue lifting the pair further towards the 0.7290-0.7300 supply zone, above which the momentum could get extended towards 0.7345-50 hurdle.

On the flip side, 50-day SMA, near mid-0.7200s, now seems to protect the immediate downside, which if broken might now turn the pair vulnerable to head back towards challenging the 0.7200 handle.