NZD/USD finds resistance near 0.6900, starts consolidating daily gains

• Trade optimism helps antipodeans stay strong.
• US Dollar Index drops to 96.70 area.

The NZD/USD pair gained traction in the early trading hours of the Asian session and reached its highest level in 12 days at 0.6893 but struggled to preserve its bullish momentum. With markets quieting down in the last couple of hours amid the thin trading volume, the pair has gone into a consolidation phase and was last seen trading at 0.6872, adding 0.1% on the day.

Over the weekend, U.S. President Trump,  via Twitter, said that big progress was being made on many different fronts in China trade talks ahead of this week’s round of negotiations in Washington and helped trade-sensitive currencies such as the AUD and NZD start the week on a positive note. Additionally, New Zealand PM Jacinda Arden told reporters that the relationship with New Zealand and China were ‘robust and mature’, to provide an additional boost to the kiwi.

On the other hand, the greenback struggled to recover the losses that it suffered in the second half of the previous week and supported the pair’s rally. However, with the trading volume thinning out in the second half of the day due to the President’s Day holiday in the U.S., the US Dollar Index steadied near the 96.70 level and didn’t allow the pair to continue to push higher.

On Tuesday, the RBA will publish the minutes of its last meeting and the AUD/USD pair’s reaction to the publication could be the next catalyst for the pair.

Key technical levels