NZD/USD weakens back closer to 0.70 handle

   •  Fails to capitalize on early uptick amid reviving USD demand.
   •  A modest uptick in the US bond yields prompts additional weakness.
   •  Focus remains on this week’s RBNZ monetary policy update.

The NZD/USD pair surrendered early gains and turned lower for the second consecutive session, albeit has managed to hold its neck above the key 0.70 psychological mark.

The pair's early modest uptick quickly ran out of steam and was being capped by some renewed US Dollar buying interest. Investors now seem to have fully digested Friday's mixed US monthly jobs report, with a modest uptick in the US Treasury bond yields underpinning the USD demand and prompting some fresh weakness around higher-yielding currencies - like the Kiwi.

Adding to this, a mildly weaker tone around commodity space did little to lend any support to commodity-linked currencies and stall the pair's retracement slide of around 30-35 pips from an intraday high level 0.7042.

Looking at the broader picture, the pair has been oscillating within a broader trading range over the past one-week or so as investors seemed reluctant to place aggressive bets ahead of this week's RBNZ monetary policy update, due during the Asian session on Thursday. 

There aren't any major market-moving economic releases due on Monday and hence, the pair seems more likely to continue with its consolidative price action ahead of the next big catalyst.

Technical levels to watch

Any dip below the 0.70 handle might continue to find some support near the 0.6985 region, which if broken might turn the pair vulnerable to head towards testing 0.6945-40 zone en-route the 0.6900 handle. 

On the upside, the 0.7040-50 region now seems to have emerged as an immediate hurdle, above which the pair is likely to aim towards reclaiming the 0.7100 handle before eventually heading towards mid-0.7100s supply zone.