NZD/USD climbs beyond 0.6500 mark, near 2-week tops amid notable USD supply

• NZD/USD gains traction for the second straight session on Tuesday amid a broad-based USD selloff.
• The upbeat market mood provided an additional boost to the perceived riskier currency, the kiwi.
• The pair now seems poised to aim back towards retesting multi-month tops, near the 0.6585 area.

The USD bearish pressure remained unabated through the early North American session and lifted the NZD/USD pair to 1-1/2-week tops, around the 0.6525 region in the last hour.

The pair gained positive traction for the second straight session on Tuesday and built on the overnight goodish rebound from the 0.6380 region, or three-week lows. The momentum was sponsored by some heavy selling witnessed around the US dollar and the prevalent upbeat market mood.

The greenback failed to capitalize on its early uptick, rather met with some fresh supply and retreated further from three-week tops set on Monday. The reaction came after White House trade advisor Peter Navarro clarified that his comments on the US-China trade agreement had been taken wildly out of context.

It is worth recalling that that Navarro told Fox News that the trade agreement with China has been terminated. Navarro later clarified that the phase-one pact remained in force. The US President Donald Trump provided further assurance and tweeted that the deal was “fully intact”, which triggered a sharp recovery in the global equity markets.

The upbeat market mood got an additional boost following the release of stronger-than-expected PMI reports from the Eurozone and the UK. This, in turn, forced investors to continue dumping the safe-haven greenback and drove flows towards perceived riskier currencies, including the kiwi.

Apart from this, possibilities of some short-term trading stops being triggered above the key 0.6500 psychological mark further seemed to have collaborated to the NZD/USD pair’s latest leg up. The pair shot to the highest level since June 11 and now seems poised to extend the momentum further towards the 0.6560 supply zone en-route multi-month tops, around the 0.6585 area set on June 10.

Market participants now look forward to the flash version of US Manufacturing/Services PMI for some respite for the USD bulls. This along with the release of New Home Sales data and the Richmond Manufacturing Index might produce some meaningful trading opportunities.

Technical levels to watch