“¢ Persistent USD weakness helps gain strong traction on Monday.
“¢ Improving risk appetite provides an additional boost.
“¢ Technical buying above 0.70 further contributes to bullish momentum.
The NZD/USD pair built on its strong bullish momentum beyond the key 0.70 psychological mark and jumped to one-month tops in the last hour.
After Friday’s brief pause, the pair caught some strong bids on Monday and was further supported by the ongoing sharp fall in the US Dollar, which has failed to gain any respite from a modest uptick in the US Treasury bond yields.
Investors’ shrugged off the latest signs of strength in the US economy, reinforced by the latest upbeat US monthly jobs report, with concerns over escalating trade tensions exerting some fresh downward pressure on the greenback and assisting the pair to build on last week’s strong gains.
Today’s strong up-move could also be attributed to a follow-through technical buying on a sustained move above the 0.70 handle, with improving global risk appetite providing an additional boost to perceived riskier currencies, including the New-Zealand Dollar.
In absence of any major market moving economic releases from the US, the USD price dynamics might continue to act as an exclusive driver of the pair’s momentum on the first trading day of a new week.
Technical levels to watch
A follow-through momentum beyond mid-0.7000s has the potential to continue lifting the pair towards 50-day SMA resistance near the 0.7100 handle en-route the very important 200-day SMA barrier near the 0.7125-30 region.
On the flip side, 0.7020 level now seems to protect the immediate downside, which if broken might turn the pair vulnerable to break back below the 0.70 handle and head towards testing its next support near the 0.6965-60 zone.
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