NZD/USD: Bulls look to build on momentum beyond 0.7200, focus remains on US data
|- NZD/USD gained traction for the second straight day amid some fresh USD selling bias.
- Dovish Fed expectations, sliding US bond yields, positive risk tone undermined the buck.
- Investors now look forward to the US Retail Sales figures for a fresh directional impetus.
The NZD/USD pair climbed to two-day tops during the first half of the European session, with bulls looking to extend the momentum further beyond the 0.7200 mark.
The pair built on the previous day's rebound from the 0.7135 region, or over one-week lows and gained some follow-through traction on the last trading day of the week. This marked the second consecutive day of a positive move and was sponsored by the emergence of some fresh selling around the US dollar.
The USD struggled to capitalize on this week's positive move, instead met with some fresh supply amid the Fed's stubbornly dovish stance. A slew of Fed officials reiterated that price pressures would prove transitory and is unlikely to prompt an immediate shift in the US central bank's positioning.
Investors now seem convinced that the Fed would keep interest rates low for a longer period. This was reinforced by the ongoing decline in the US Treasury bond yields. Apart from this, a fresh leg up in the equity markets further undermined the safe-haven USD and benefitted the perceived riskier kiwi.
Moving ahead, the focus now shifts to the US economic docket, highlighting the release of monthly Retail Sales figures and Prelim Michigan Consumer Sentiment. The data will be scrutinized for guidance on whether the upward pressure on prices will persist, which will influence Fed rate expectations.
This, along with the US bond yields, will play a key role in driving the USD in the near term. Apart from this, traders will further take cues from the broader market risk sentiment for some short-term 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.