- NZD/USD pair met with some fresh supply on Monday amid a pickup in the USD demand.
- The prevalent risk-on mood failed to lend any support to the perceived riskier kiwi currency.
The NZD/USD pair maintained its heavily offered tone through the early European session and was last seen trading near daily lows, just below the 0.6100 mark.
The pair failed to capitalize on last week's goodish bounce from sub-0.6000 levels, instead met with some fresh supply on the first day of a new trading week amid some renewed buying interest around the US dollar. As investors looked past Friday's awful US NFP report, a modest intraday uptick in the US Treasury bond yields helped revive the USD demand and turned out to be a key factor that exerted some pressure on the NZD/USD.
Meanwhile, the global risk sentiment remained well supported by the latest optimism over the re-opening of the economy in some parts of the world and hopes for a quicker-than-expected recovery from the coronavirus-induced lockdowns. The upbeat mood around the equity markets, however, failed to impress bulls or lend any support to the perceived riskier kiwi currency, forcing the pair to erase the previous session's positive move to over one-week tops.
It will now be interesting to see if the pair is able to attract any fresh buying at lower levels or continues with its retracement slide as the focus now shifts to the latest RBNZ monetary policy update on Wednesday. In the meantime, the USD price dynamics might continue to act as a key driver of the pair's momentum on Monday and produce some meaningful trading opportunities amid absent relevant market moving economic releases from the US.
Technical levels to watch
Some follow-through selling has the potential to drag the pair further towards the 0.6045 horizontal support, below which the momentum could get extended back towards challenging the key 0.6000 psychological mark. On the flip side, the 0.6155-70 region might continue to act as an immediate resistance, which if cleared could set the stage for an extension of the positive move towards reclaiming the 0.6200 round-figure mark.
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