“¢ A modest uptick in the US bond yields helped ease the USD bearish pressure.
“¢ The prevalent cautious mood further underpins the buck’s safe-haven status.
“¢ Focus shifts to US-China trade talks, the latest FOMC policy update and NFP.
The NZD/USD pair surrendered a major part of its early gains to near six-week tops and might now be headed towards the lower end of its daily trading range.
After Friday’s abrupt selloff, triggered by reports that reinforced dovish Fed expectations, a modest pickup in the US Treasury bond yields helped ease the US Dollar bearish pressure and was seen as one of the key factors prompting some selling at higher levels.
Meanwhile, a slight deterioration in investors’ appetite for riskier assets, as depicted by a weaker tone around equity markets, also underpinned the greenback’s perceived safe-haven status and further collaborated to the pair’s intraday slide over 40-pips.
Attention now shifts to the high-level US-China trade talks, which coupled with the latest FOMC monetary policy update and the closely watched US monthly jobs report (NFP) will play an important role in determining the pair’s next leg of a directional move.
Technical levels to watch
Immediate support is pegged near the 0.6820 level, below which the pair is likely to drift below the 0.6800 handle and test 0.6775-70 support area. On the flip side, the 0.6870-75 region now seems to act as an immediate resistance, which if cleared might lift the pair further beyond the 0.6900 handle towards testing the 0.6825-30 supply zone.
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