NZD/USD consolidates daily gains below 0.70
|The kiwi remains as one of the strongest currencies against the greenback on Monday, with the NZD/USD pair refreshing its monthly high just a couple of pips below the 0.70 handle, at 0.6998. Unable to sustain its bullish momentum amid a lack of fresh fundamental catalysts in the NA session, the pair has been moving in a tight channel in the last couple of hours. As of writing, the pair was at 0.6994, up nearly 1% on the day.
The commodity-linked kiwi's solid performance on Monday seems to be fueled by the rising crude oil prices on recent reports suggesting that an OPEC-led supply cut may be extended for another nine months. In addition to a stronger NZD, the greenback continues to stay under a constant selling pressure amid unresolved political issue in the U.S. On Monday, the US Dollar Index fell further to a new 6-month low at 96.70 and has been consolidating its losses in a horizontal band below the 97 handle. At the moment, the index is at 96.90, down 0.1% on the day.
The next data from New Zealand will be the trade balance figures scheduled to be released in the early Asian session on Wednesday. A contraction in the trade surplus could allow the RBNZ Governor Wheeler to preserve the accommodative policy stance before his term ends in September, making it difficult for the NZD to build on its recent gains.
Technical outlook
With a decisive break above 0.70 (psychological level), the pair could target 0.7040 (100-DMA) and 0.7080 (200-DMA). To the downside, supports align at 0.6950 (50-DMA), 0.6900 (psychological level/10-DMA) and 0.6840 (May 4 low).
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.