NZD/USD holds comfortably above 0.7000 mark, lacks follow-through

The NZD/USD pair traded with a mild positive bias through the early European session and was last seen trading near the top end of its daily trading range, around the 0.7025-30 region.

The pair built on Friday's recovery move from two-week lows and gained some follow-through traction for the second consecutive session on Monday amid a subdued US dollar demand. That said, a combination of factors held bulls from placing any aggressive bets and kept a lid on any meaningful upside for the NZD/USD pair, at least for the time being.

The headline NFP print showed that the US economy added much higher than anticipated, 850K jobs in June. The big beat, however, was offset by an unexpected rise in the jobless rate, which eased fears about an earlier Fed rate hike. This, in turn, forced investors to lighten their USD long positions and extended some support to the NZD/USD pair.

Meanwhile, the supporting factor, to a larger extent, was negated by a generally softer tone around the equity markets. This acted as a headwind for the perceived riskier kiwi and capped gains for the NZD/USD pair. Investors also seemed reluctant amid relatively thin liquidity conditions on the back of the Independence Day holiday in the US.

Moving ahead, the market focus now shifts to the release of the FOMC meeting minutes on Wednesday. Investors will look for clues about the Fed's near-term monetary policy outlook. This will play a key role in influencing the USD price dynamics in the near term and help determine the next leg of a directional move for the NZD/USD pair.

Technical levels to watch