NZD/USD bounces-off 0.7400 as DXY fails again near 94.00

Dhwani Mehta FXStreet

The NZD/USD pair reversed sharply from daily lows over the last hour, as the bulls guarded the 0.7400 barrier amid renewed USD selling and higher oil prices.

NZD/USD: Downside still in play?

The spot looks to take on the recovery above 5-DMA located at 0.7435 levels, after the US dollar index (DXY), which gauges the greenback’s strength against its six major peers, faced rejection once again just shy of 94 handle and subsequently came under fresh selling pressure, now printing fresh daily lows of 93.75. Uncertainty surrounding the Trump’s presidency continues to weigh on the buck.

Moreover, the ongoing strength seen in oil prices, in the wake of Saudi Arabia’s pledge to lower oil exports, also aided the rebound in the resource-linked Loonie. Brent Oil is having another go at 1-hr 200-MA hurdle

Also, renewed optimism around the post-Brexit trade deal with New Zealand, as cited by the UK’s and New Zealand’s Foreign Minister, collaborate to the bounce in the spot.

Focus now shifts towards the US consumer confidence numbers, which could provide fresh impetus to the US dollar, especially after yesterday’s strong PMI numbers. Meanwhile, the NZ trade balance and Fed meeting due tomorrow will be also closely eyed for fresh trading opportunities.

NZD/USD Levels to consider

NZD/USD found fresh bids at 0.7400, with a test of 0.7461 (multi-month highs) due on the cards, which could open doors towards 0.7500 (psychological levels). To the downside lies 0.7390 (10-DMA/ Jul 21 low) still guarding 0.7335 (20-DMA) and a break back below 0.7264 (50-DMA) are key near-term downside areas.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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