NZD/USD keeps the red below mid-0.7400s

Haresh Menghani FXStreet

The NZD/USD pair snapped four consecutive days of winning streak and traded with mild negative bias through the mid-European session on Monday.

A modest pickup in the US Treasury bond yields helped the greenback to stage a minor recovery from 13-month lows and prompted traders to move out of higher yielding currencies - like the Kiwi, especially after the pair's recent upsurge of over 250-pips over the past two weeks.

Further downside, however, remained limited as the sentiment around the US Dollar has turned highly bearish amid the ongoing controversy around Russian meddling in the US Presidential election and market skepticism over the US President Donald Trump's ability to push through pro-growth economic policies.

Hence, it would be prudent to wait for a strong follow through selling pressure before confirming that the pair might have topped out in the near-term.

Next on tap would be the US economic docket, featuring the release of US PMI prints (services and manufacturing PMI) and existing home sales, which would be looked upon to grab some short-term trading opportunities during early NA session.

Technical levels to watch

Weakness below 0.7420 level (session lows) could get extended towards the 0.7400 handle en-route 0.7370-65 strong horizontal support. On the upside, sustained momentum above mid-0.7400s now seems to pave way for continuation of the pair's near-term upward trajectory towards Sept. 2016 highs resistance near the 0.7475 region ahead of the key 0.75 psychological mark.

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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