NZD/USD slides further below 0.7300 handle on upbeat US CPI

Having faced rejection near 0.7325-30 area for second straight session, the NZD/USD extended its slide further below 0.7300 handle following the release of upbeat US inflation data.

Currently trading at a fresh session low level of 0.7270, the pair came under intense selling pressure after US consumer inflation, as measured by CPI, surpassed expectations and came-in at 1.1% y-o-y for August. The reading did little to boost prospects of an eventual Fed rate-hike action at its September meeting but provided a much needed respite for the US Dollar bulls. 

Following the release, the greenback surged across the board and the pair erased all of its Thursday's recovery gains posted on the back of dismal monthly retail sales data from the US.

Traders now turn their attention to preliminary release of UoM Consumer Sentiment index from the US, which if surprises on the upside is likely to exert further selling pressure around the major. Nevertheless, the pair is now headed for its first weekly decline in the previous three. 

Technical levels to watch

On the immediate downside, 0.7250 level is likely to act as immediate support below which the pair is likely to aim towards testing 50-day SMA support near 0.7215 region.

Meanwhile on the upside, 0.7300 handle now becomes immediate resistance, followed by a strong resistance near 0.7325-30 region. Only a sustained strength above 0.7330 resistance might now negate any near-term bearish expectations.