- NZD/USD gained strong positive traction for the third successive session on Monday.
- A broad-based USD weakness remained supportive of the ongoing positive momentum.
- A combination of factors might help limit the USD losses and cap gains for the major.
The intraday USD selling picked up pace during the mid-European session and pushed the NZD/USD pair to four-day tops, around the 0.6975 region in the last hour.
The pair built on last week's rebound from the 0.6860 region, or the lowest level since August 23 and gained follow-through traction for the third successive session on Monday. The ongoing US dollar retracement slide from over one-year tops turned out to be a key factor that provided a goodish lift to the NZD/USD pair.
That said, a combination of factors should help limit deeper losses for the greenback and keep a lid on any meaningful upside for the NZD/USD pair. Expectations for an early policy tightening by the Fed, along with a fresh leg up in the US Treasury bond yields should continue to act as a tailwind for the greenback.
Investors seem convinced that the Fed would begin rolling back its massive pandemic-era stimulus as soon as November. The markets also seem to have started pricing in the prospect for a Fed interest rate hike in 2022. Apart from this, the risk-off impulse could further lend some support to the safe-haven USD.
Worries that Evergrande Group's debt crisis could spread to China's entire property sector tempered investors' appetite for perceived riskier assets. This was evident from a generally weaker tone around the equity markets. This, in turn, might hold traders from placing aggressive bullish bets around the perceived riskier kiwi.
Hence, it remains to be seen if bulls are able to capitalize on the move of the NZD/USD pair meets with some fresh supply at higher levels. There isn't any major market-moving economic data due for release from the US on Monday, further making it prudent to wait for a strong follow-through buying before positioning for any further gains.
Technical levels to watch
|Today last price||0.6975|
|Today Daily Change||0.0025|
|Today Daily Change %||0.36|
|Today daily open||0.695|
|Previous Daily High||0.6952|
|Previous Daily Low||0.6877|
|Previous Weekly High||0.7034|
|Previous Weekly Low||0.6859|
|Previous Monthly High||0.7171|
|Previous Monthly Low||0.6859|
|Daily Fibonacci 38.2%||0.6923|
|Daily Fibonacci 61.8%||0.6905|
|Daily Pivot Point S1||0.69|
|Daily Pivot Point S2||0.6851|
|Daily Pivot Point S3||0.6825|
|Daily Pivot Point R1||0.6976|
|Daily Pivot Point R2||0.7001|
|Daily Pivot Point R3||0.7051|
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.