NZD/USD advances to 0.68, turns positive for the week

• NZD/USD adds nearly 50 pips in the NA session.
• USD suffers heavy losses following Trump & Bullard comments.

After edging lower toward the 0.67 handle during the Asian trading hours, the NZD/USD pair went into a consolidation phase near mid-0.67s but gathered traction in the second half of the day to advance to the 0.68 mark. As of writing, the pair was up 0.85%, or 57 pips, on the day at 0.6802.

Earlier today, a sharp fall witnessed in the CNY weighed on the NZD amid New Zealand’s trade relationship with China. However, the CNY’s rebound and a broad-based selling pressure surrounding the USD helped the NZD/USD pair turn flat on the day.

In the early NA session, the USD’s bearish momentum continued to gather strength after US President Donald Trump, once again, delivered remarks regarding the Fed’s monetary policy. Stating that a stronger USD would put them ad a disadvantage against other major economies that applied lower interest rates, Trump said that monetary tightening would hurt what his administration has been trying to achieve.

Furthermore, St. Louis Fed President Bullard talked about the yield curve inversion and argued that it was a sign toward the economic expansion losing momentum and added that the Fed would need to hold off rate hikes to tackle that issue.

The US Dollar Index, which dropped to its lowest level since it opened the week near the 94 mark at 94.28, and was last seen moving sideways in the 94.35-40 area.

Technical levels to consider

With a daily/weekly close above 0.6800 (daily high/psychological level), the pair could first target 0.6855 (Jul. 9 high) ahead of 0.6890/0.6900 (50-DMA/psychological level). On the downside, supports align at 0.6720 (daily low), 0.6685 (Jul. 2 low) and 0.6600 (psychological level).