NZD/USD retreats from session highs, looks to close the week above 0.68
- DXY stages a modest recovery in the last hour.
- Wall Street extends gains as trade fears ease.
- NZD/USD remains on track to wrap up the week in the positive territory.
The NZD/USD pair advanced to a 10-day high at 0.6840 as the greenback came under pressure following the NFP report in the early NA session. However, the pair is now having a difficult time stretching higher as the US Dollar Index starts retracing its losses.
The report released by the U.S. Bureau of Labor Statistics on Friday revealed that the total nonfarm payroll employment increased by 213,000 in June while the unemployment rate rose to 4.0% from 3.8% in May. Further details of the report showed that the labor force participation rate inched higher to 62.9%, and the average hourly earnings grew by 0.2% to match the May reading and to fall short of the market estimate of 0.3%.
After dropping all the way down to 93.63, the US Dollar Index gained traction in the last hour and was last seen at 93.80, where it was down 0.35% on the day. This recent modest rally seems to have been caused by a profit-taking at the London close.
In the meantime, major equity indexes are pushing higher in the session as trade fears continue to lose their impact on the market sentiment, which help the risk-sensitive kiwi stay resilient against the buck. Wall Street's fear gauge, the CBOE Volatility Index (VIX), was last seen down nearly 10% on the day.
Technical levels to consider
The immediate resistance for the pair aligns at 0.6840 (daily high) followed by 0.6915 (50-DMA), and 0.7000 (psychological level). On the downside, supports are located 0.6780 (daily low), 0.6735 (Jun. 29 low) and 0.6685 (Jul. 4 low).
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.
