- NZD/USD gains traction for the second straight session on Friday.
- The risk-on mood, sustained USD selling bias remained supportive.
- Bulls take some breather as the focus shifts to the key NFP report.
The NZD/USD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading band just above the 0.6100 mark, or weekly tops.
The pair gained traction for the second straight session on Friday and built on the previous day's goodish intraday bounce of nearly 100 pips from weekly lows – levels just below the key 0.60 psychological mark. The momentum assisted the pair to climb further beyond the 0.6100 round-figure mark and was being supported by a combination of factors – further improvement in the global risk sentiment and the prevalent US dollar selling bias.
The latest optimism over the re-opening of economies in some parts of the world remained supportive of the upbeat market mood, which got an additional boost from reports overnight that US-China trade negotiators had held a phone call. Both the parties agreed to strengthen economic and public health cooperation and boosted investors' confidence. This, in turn, acted as one of the key factors that benefitted perceived riskier currencies, including the kiwi.
On the other hand, the US dollar remained depressed on the back for speculations that the Fed might push rates below zero. Investors argued that the Fed will be forced to become more experimental to deal with worse-than- anticipated economic downturn caused by coronavirus-induced lockdowns.
However, a modest pickup in the US Treasury bond yields helped limit any further USD downside and kept a lid on any further gains for the major. Investors also seemed reluctant to place aggressive bets, rather preferred to wait on the sidelines ahead of Friday's release of the closely watched US monthly jobs report – popularly known as NFP.
Technical levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD fluctuates in daily range above 1.0600
EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.
GBP/USD stabilizes near 1.2450 ahead of Powell speech
GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.
Gold retreats to $2,370 as US yields push higher
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
US outperformance continues
The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.