NZD/USD bulls flirt with monthly high, around 0.6730 amid positive risk tone/weaker USD
|- NZD/USD gained traction for the fourth straight day and climbed back closer to monthly high.
- A positive risk tone undermined the safe-haven USD and benefitted the perceived riskier kiwi.
- Acceptance above the 0.6700 might have already set the stage for a further appreciating move.
The NZD/USD pair added to its intraday gains and shot to the 0.6730 area, back closer to the monthly high during the first half of the European session.
The pair built on this week's goodish rebound from sub-0.6600 levels and gained follow-through traction for the fourth successive day on Friday. A recovery in the risk sentiment undermined the US dollar's relative safe-haven status and turned out to be a key factor that benefitted perceived riskier currencies, including the kiwi.
The US Secretary of State Antony Blinken accepted an invitation to meet Russian Foreign Minister Sergei Lavrov late next week and raised hopes for a diplomatic solution to the Ukraine crisis. This, in turn, boosted investors' appetite for riskier assets, which was evident from a generally positive tone around the global equity markets.
The greenback was further pressured by the uncertainty about the pace of the Fed's tightening cycle. In fact, the minutes of the January FOMC meeting released on Wednesday failed to reinforce expectations for a 50 bps rate hike in March. Adding to this, the geopolitical developments could force the Fed to adopt a less aggressive policy stance.
Meanwhile, the NZD/USD pair now seems to have found acceptance above the 0.6700 round-figure mark. Some follow-through buying will be seen as a fresh trigger for bullish traders and set the stage for a further near-term appreciating move. The next relevant hurdle is pegged near mid-0.6700s, above which bulls might aim to reclaim the 0.6800 mark.
Market participants now look forward to the US Existing Home Sales data, due for release later during the early North American session. This, along with fresh geopolitical developments and the broader market risk sentiment, will influence the USD price dynamics and produce some meaningful trading opportunities around the NZD/USD pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.