NZD/USD retreats after spiking to multi-year highs, holds near 0.7300
- NZD/USD rose to its highest level since April 2018.
- US Dollar Index stays relatively quiet below 90.50.
- Mid-tier data releases from US and New Zealand are coming up next.
The NZD/USD pair gained nearly 100 pips last week and extended its rally during the early Asian trading hours on Monday. After touching its highest level since April 2018 at 0.7338, the pair lost its traction and was last seen posting small daily gains at 0.7307.
Focus shifts to mid-tier data releases
In the absence of significant fundamental drivers, the risk-on market environment at the start of the week provided a boost to the NZD. However, the market mood seems to be turning cautious during the European session with the S&P 500 Futures losing 0.7%. Moreover, Germany's DAX 30 and the UK's FTSE 100 indexes are both down more than 0.5% on the day.
If Wall Street's main indexes start the day deep in the negative territory, NZD/USD could have a tough time staying in the positive territory with the greenback regathering its strength.
Meanwhile, the US Dollar Index is a little changed on the day around 90.30. Later in the day, the Chicago Fed's National Activity Index and the Dallas Fed Manufacturing Index will be featured in the US economic docket. On Tuesday, the fourth-quarter Retail Sales report from New Zealand will be looked upon for fresh catalysts.
Technical levels to watch for
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.
