- NZD/USD reversed an Asian session dip to weekly lows, around the 0.7165 region.
- The upside seems limited amid a modest USD strength, ahead of the US CPI report.
The NZD/USD pair managed to rebound over 20 pips from weekly lows and refreshed daily tops heading into the European session. The pair was last seen trading with modest intraday gains, around the 0.7185-90 region.
The pair attracted some buying near the 0.7165 region on Wednesday and for now, seems to have stalled this week's retracement slide. This marked the first day of a positive move in the previous three and assisted the NZD/USD pair to recover a part of the previous day's losses.
Meanwhile, any meaningful upside seems elusive amid a modest US dollar strength. The USD built on the overnight rebound and gained some follow-through traction amid some repositioning trade ahead of the US consumer inflation figures, due later during the early North American session.
That said, a softer tone surrounding the US Treasury bond yields might hold the USD bulls from placing any aggressive bets. It is worth recalling that the yield on the benchmark 10-year US government bond fell below the 1.50% threshold on Tuesday for the first time since May 7.
Nevertheless, the market focus will remain glued to the US CPI report for May. This will be another piece of important macro data that would set the tone for the upcoming FOMC meeting on June 15-16 and play a key role in influencing the near-term USD price dynamics.
Heading into the key event risk, investors might prefer to wait on the sidelines. This, in turn, might turn out to be another factor that might keep a lid on any further gains for the NZD/USD pair, at least for the time being, and warrants some caution for bullish traders.
Technical levels to watch
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