NZD/USD pulls away from daily lows, stays quiet below 0.69
- US Dollar Index loses momentum ahead of 96.
- Factory orders from the U.S. disappoint on Monday.
- Coming up: RBA interest rate decision.
The broad-based USD strength on Monday weighed on the NZD/USD pair and dragged it to a fresh 5-day low of 0.6870. With the greenback struggling to preserve its bullish momentum in the last couple of hours, the pair recovered a small part of its daily losses and was last down 0.25% on a daily basis at 0.6880.
Building on Last Friday's data-driven rebound, the US Dollar Index came within a touching distance of the critical mark of 96 in the early NA session on Monday. A sharp increase in the US T-bond yields further supported the buck. However, with the U.S. Census Burasu announcing a contraction of 0.6% in manufactured goods orders in November, the DXY struggled to push higher and was last up 0.26% on the day at 95.87.
In the early trading hours of the Asian session, the RBA will be publishing its interest rate decision and the monetary policy statement. If the AUD/USD pair shows a significant reaction to the RBA's announcements, the highly-correlated NZD/USD could also make similar movements. Later this week, at 21:45 GMT on Wednesday, the unemployment data from New Zealand will be watched closely by participants.
Technical levels to consider
The pair could face the initial support at 0.6870 (daily low) ahead of 0.6820 (Jan. 30 low) and 0.6785 (50-DMA). On the upside, resistances are located at 0.6905 (daily high), 0.6940 (Feb. 1 high) and 0.7000 (psychological level).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
