NZD/USD struggles near two-week lows, just above mid-0.6900s amid stronger USD
|- NZD/USD remained under some selling pressure through the first half of the European session.
- Hawkish Fed expectations pushed the USD to fresh three-month tops and acted as a headwind.
- The downside seems cushioned as investors turn cautious ahead of the US monthly jobs report.
The NZD/USD pair remained on the defensive through the early European session and was last seen hovering near two-week lows, just above mid-0.6900s.
The pair prolonged its recent pullback from the vicinity of the 0.7100 mark and edged lower for the sixth consecutive session on Friday. The NZD/USD pair has now erased a major part of last week's goodish recovery gains from YTD lows and was pressured by the strong bullish sentiment surrounding the US dollar.
The markets have been speculating that the Fed will tighten its monetary policy earlier if price pressures continue to intensify. The market expectations were further fueled by Wednesday's US ISM Manufacturing survey, which showed that the prices paid sub-component jumped to a record 92.1 in June from 88 previous.
This, in turn, continued underpinning the greenback and acted as a headwind for the NZD/USD pair. In fact, the key USD Index jumped to fresh three-month tops and seemed unaffected by declining US Treasury bond yields. Even the prevalent risk-on mood did little to lend any support to the perceived riskier kiwi.
That said, investors seemed reluctant to place any aggressive bets, instead might prefer to wait on the sidelines ahead of the US monthly jobs data, due later during the early North American session. This seemed to be the only factor that extended some support and helped limit any further losses for the NZD/USD pair.
The closely watched NFP report could influence the Fed's monetary policy outlook and play a key role in driving the USD price dynamics in the near term. This, in turn, would assist investors to determine the next leg of a directional move for the NZD/USD pair.
Technical levels to watch
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