NZD/USD pares early gains, turns flat below 0.6600 ahead of RBNZ


  • NZD/USD struggles to extends its recovery, trades below 0.6600.
  • New Zealand reported its first coronavirus cases in more than three months.
  • US Dollar Index rebounds from daily lows on surging T-bond yields.

The NZD/USD pair rose to a daily high of 0.6630 in the early trading hours of the European session on the back of risk-on flows but lost its traction on coronavirus headlines. With the greenback showing some resilience against its peers in the second half of the day, the pair continued to erase its gains and turned flat on the day near 0.6590.

Focus shifts to RBNZ meeting

Earlier in the day, New Zealand reported its first confirmed coronavirus infections in 102 days and announced that it will reintroduce COVID-19-related restrictions, triggering a kiwi selloff. On Wednesday, the Reserve Bank of New Zealand (RBNZ) will announce its rate decision and will release its policy statement.

Previewing the RBNZ event, "we cannot rule out the possibility of negative interest rates in time but that will come with considerable baggage and we do not expect the RBNZ to employ that option for now," UOB analysts said. "We expect QE to be expanded to a cap of NZD90 billion by August. Another option for the RBNZ is to adjust the QE programme to a type of ‘yield curve control’.”

RBNZ Preview: Eight major banks expectations.

On the other hand, the US Dollar Index (DXY), which came under renewed bearish pressure amid risk-on flows, rebounded modestly, causing NZD/USD to stay in the negative territory. Supported by an 11% upsurge witnessed in the 10-year US Treasury bond yield, the DXY recovered slightly and was last seen still losing 0.17% on the day at 93.45.

Technical levels to watch for

NZD/USD

Overview
Today last price 0.6594
Today Daily Change 0.0004
Today Daily Change % 0.06
Today daily open 0.659
 
Trends
Daily SMA20 0.6623
Daily SMA50 0.6538
Daily SMA100 0.6289
Daily SMA200 0.6364
 
Levels
Previous Daily High 0.6613
Previous Daily Low 0.6577
Previous Weekly High 0.6691
Previous Weekly Low 0.6575
Previous Monthly High 0.6716
Previous Monthly Low 0.644
Daily Fibonacci 38.2% 0.6591
Daily Fibonacci 61.8% 0.6599
Daily Pivot Point S1 0.6574
Daily Pivot Point S2 0.6557
Daily Pivot Point S3 0.6538
Daily Pivot Point R1 0.661
Daily Pivot Point R2 0.6629
Daily Pivot Point R3 0.6646

 

 

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