NZD/USD declines below 0.7150 following last week's rally
|- NZD/USD stages a correction after posting strong gains last week.
- US Dollar Index stays in the positive territory above 92.20.
- Trading action is likely to remain subdued due to Labor Day holiday in US.
The NZD/USD pair gained more than 150 pips last week but struggled to preserve its bullish momentum on Monday. As of writing, the pair was down 0.25% on the day at 0.7142.
DXY rebounds in quiet day
On Friday, the disappointing jobs report from the US, which showed that Nonfarm Payrolls rose by only 235K in August, triggered a USD selloff and allowed NZD/USD to climb to its strongest level since early June at 0.7171. However, the US Dollar Index (DXY) is staging a rebound at the start of the week, forcing NZD/USD to retrace its rally. Currently, the DXY is up 0.17% on the day at 92.27.
Nevertheless, the lack of high-tier macroeconomic data releases and fundamental developments suggests that the DXY's rebound is a technical correction. Furthermore, the trading action is expected to remain subdued in the remainder of the day with the US markets being closed due to the Labor Day holiday.
NZD/USD: Waning Delta cases and higher yields to boost the kiwi – ANZ.
On Tuesday, the Reserve Bank of Australia (RBA) will announce its Interest Rate Decision and release the Rate Statement. A sharp reaction in the positively-correlated AUD/USD pair could impact NZD/USD's movements during the Asian trading hours.
Technical levels to watch for
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