NZD/USD recovers early lost ground to fresh YTD lows

   •  USD fails to preserve early gains and helps bounce off lows.
   •  Surging US bond yields likely to cap any meaningful up-move.
   •  US retail sales/NZ GDT price index to set the tone later in the day.

The NZD/USD pair quickly reversed an early dip to sub-0.6900 level and has now jumped back to the top end of its daily trading range.

The US Dollar stalled its recent corrective slide that started last week and gained some short-term respite from hawkish comments by Cleveland Fed President Loretta Mester. 

The turnaround accelerated during the second half of Monday’s US trading session and was further supported by surging US Treasury bond yields, which prompted some aggressive selling around higher-yielding currencies - like the Kiwi. 

The pair kept losing ground through the Asian session on Tuesday and dropped to an intraday low level of 0.6892, or fresh yearly tops, following the unimpressive releases of Chinese industrial and retail sales figures. 

Despite a follow-through upsurge in the US bond yields, the greenback struggled to gain any follow-through traction and helped the pair to rebound around 25-pips from session lows. 

Moving ahead, today's economic docket, highlighting the release of US monthly retail sales data and the NZ GDT price index, would now be looked upon for some meaningful impetus later during the early NA session. 

Technical levels to watch

Any subsequent recovery beyond 0.6925 level is likely to confront resistance near the 0.6960 region, above which the pair is likely to move back towards reclaiming the key 0.70 psychological mark. On the flip side, weakness back below the 0.6900-0.6890 region now seems to pave the way for an extension of the pair's downslide further towards 0.6855 horizontal support.