NZD/USD struggles for direction, holds steady above mid-0.7100s
- NZD/USD met with some fresh supply on the first day of a new trading week.
- A subdued USD demand, the risk-on mood helped limit losses for the major.
- Monday’s US ISM PMI and Powell’s speech eyed for some trading impetus.
The NZD/USD pair remained on the defensive through the early European session and was last seen hovering near daily lows, just above mid-0.7100s.
The pair struggled to capitalize on its modest bullish gap opening on the first day of a new trading week, instead met with some fresh supply near the 0.7185 region. Bears might now be looking to extend last week's sharp retracement slide from the highest level since early March, though a combination of factors helped limit the downside, at least for now.
The US dollar struggled to capitalize on last week's goodish rebound from the lowest level since February 26 amid expectations that the Fed will keep interest rates low for a longer period. This, along with the prevalent risk-on mood around the equity markets, further undermined the safe-haven USD and extended some support to the perceived riskier kiwi.
Hence, it will be prudent to wait for some strong follow-through selling below Friday's swing lows, around mid-0.7100s, before positioning for any further depreciating move. Market participants now look forward to the release of the US ISM Manufacturing PMI. This, along with the Fed Chair Jerome Powell's scheduled speech will provide a fresh impetus to the NZD/USD pair.
Technical levels to watch