NZD/USD extends higher above 0.68 as DXY slips below 94.50

• Greenback weakness lifts the pair above the 0.68 handle in the early NA session.
• US Dollar Index loses traction on Monday and drops to session lows near 94.40.

The NZD/USD pair gained traction in the last hour to stretch higher above the 0.68 mark as greenback struggles to find demand ahead of the data releases. As of writing, the pair was trading at 0.6815, a couple of pips below its session high, and adding 0.3% on the day.

Ahead of the critical FOMC meeting on Wednesday, the US Dollar Index started retracing last week’s modest gains amid a lack of fresh catalysts. At the moment, the DXY is down 0.3% on the day at 94.40. Later in the session, pending home sales, which is expected to contract by 6% on a yearly basis in June, and Dallas Fed Manufacturing Index data will be released from the United States.  

Nonetheless, the greenback could limit its losses against its rivals amid rising T-bond yields. The 10-year US T-bond yield is marching higher toward the 3% mark and is up nearly 1% on the day at 2.99%.

The next data release from New Zealand will be the building permits in the Asian session on Tuesday. However, investors are unlikely to react to this data ahead of Wednesday’s unemployment figures. Experts expect the unemployment to stay steady at 4.4% in the second quarter.

Technical outlook

Despite this recent upsurge, the RSI indicator on the daily chart continues to stay near the 50 mark, suggesting that the bullish momentum isn’t strong enough to suggest a sustainable rise. On the upside, resistances could be seen at 0.6860 (50-DMA) ahead of 0.6920 (Jun. 24 high) and 0.7000 (psychological level). Supports are located at 0.6760 (Jul. 27 low), 0.6710 (Jul. 19 low) and 0.6680 (Jul. 3 low).