- NZD/USD is trading in a tight range at the start of the week.
- USD gathers strength on the back of safe-haven flows.
- Eyes on New Home Sales and Chicago Fed National Activity Index data from the US.
The NZD/USD pair gained nearly 80 pips last week and seems to have gone into a consolidation phase on Monday. As of writing, the pair was virtually unchanged on a daily basis at 0.6690.
Safe-haven flows help USD gather strength
In the absence of significant macroeconomic data releases at the start of the week, risk perception seems to be impacting currencies’ performance.
The risk-averse market environment amid the surging number of coronavirus cases in Europe and the lack of progress in stimulus talks in the US is helping the greenback find demand on Monday. At the moment, the US Dollar Index is a little above 93.00, gaining 0.3% on the day.
In the second half of the day, New Home Sales and the Chicago Fed’s National Activity Index data from the US will be looked upon for fresh impetus. Meanwhile, the S&P 500 futures are down 0.9% and a sharp drop in Wall Street’s main indexes could provide an additional boost to the USD during the American trading hours.
On Tuesday, Trade Balance data will be released from New Zealand.
Technical levels to watch for
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