NZD/USD clings to gains near session tops, around mid-0.6900s

A subdued USD price action assisted NZD/USD to gains some positive traction on Monday.
Hawkish Fed expectations should act as a tailwind for the USD and cap gains for the major.
A bank holiday in the US also warrants some caution before placing aggressive bullish bets.

Haresh Menghani FXStreet

The NZD/USD pair held on to its modest intraday gains through the early part of the European session and was last seen trading near daily tops, just below mid-0.6900s.

The pair managed to gain some positive traction on the first day of a new week and inched back closer to Friday's post-NFP swing highs amid a subdued US dollar price action. Apart from this, the uptick lacked any obvious catalyst and runs the risk of fizzling out rather quickly.

Despite the disappointing headline NFP print, investors still seem convinced that the Fed will begin tapering its bond purchases by the end of 2021. The markets have also been pricing in the possibility of a rate hike in 2022 amid fears of a faster-than-expected rise in inflation.

The market expectations were reinforced by the recent surge in the US Treasury bond yields, which should continue to act as a tailwind for the greenback and cap gains for the NZD/USD pair. In fact, the yield on the benchmark 10-year US government bond shot to four-month tops on Friday.

The US money markets will remain closed on Monday in observance of Columbus Day. This further makes it prudent to wait for a strong follow-through buying before placing aggressive bullish bets around the NZD/USD pair and positioning for any meaningful intraday appreciating move.

Technical levels to watch

NZD/USD

Overview
Today last price	0.6947
Today Daily Change	0.0008
Today Daily Change %	0.12
Today daily open	0.6939

Trends
Daily SMA20	0.6999
Daily SMA50	0.7008
Daily SMA100	0.7038
Daily SMA200	0.7108

Levels
Previous Daily High	0.6961
Previous Daily Low	0.6908
Previous Weekly High	0.6984
Previous Weekly Low	0.6876
Previous Monthly High	0.7171
Previous Monthly Low	0.6859
Daily Fibonacci 38.2%	0.6941
Daily Fibonacci 61.8%	0.6928
Daily Pivot Point S1	0.6911
Daily Pivot Point S2	0.6883
Daily Pivot Point S3	0.6859
Daily Pivot Point R1	0.6964
Daily Pivot Point R2	0.6989
Daily Pivot Point R3	0.7016

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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