NZD/USD holds above 0.73, risk reversals continue retracing NZD bearish bias

• NZD/USD clocked 3.5 week high of 0.7325 during the overnight trade.
• Options market sheds NZD bearish bias, risk reversals show.

Having created a doji candle on Friday, the NZD/USD pair picked up the bid this week and rose to 0.7324 - the highest level since March 15. As of writing, the currency pair is trading at 0.7315.

Meanwhile, the one-month NZD/USD 25 delta risk reversals (NZD1MRR) are being paid at 0.7 NZD puts vs. 0.725 NZD puts yesterday and 1.0 NZD puts on March 23.

The decline in the implied volatility premium for NZD puts, as shown by the risk reversals, indicates the investors fear the NZD/USD could rise further towards key resistance of 0.7355 (March 13 high). A close higher would signal a bullish breakout and may force faster unwinding of long(buy) NZD put (sell) positions.

NZD1MRR