NZD/USD fumbling near Friday’s close as holiday markets see thin volumes

• Kiwi closes gap early Monday, but resumes bearish lean.
• Monday is a holiday in New Zealand, NZD to trade along with broader market sentiment.

The NZD/USD is trading softly down in early Asia trading after closing a small gap that opened the new week, and the pair is back into 0.6980.

The Kiwi failed to capitalize on Friday’s risk sentiment boost brought on by positive US NFP figures, and the NZD’s technical correction from mid-May’s bottom of 0.6850.

Monday is going to be a restrained session for the NZD with New Zealand off for a long weekend in celebration of the Queen’s Birthday. The rest of the week is similarly quiet for the Kiwi, with little in the way of high-impact releases on the horizon.

No news could be good news for the NZD/USD, with a continued macroeconomic slump keeping the Reserve Bank of New Zealand (RBNZ) in a firmly dovish stance, and unlikely to begin lifting interest rates until possibly 2020. The RBNZ and New Zealand’s government remain hopeful and maintain a positive outlook on future growth prospects for the NZ economy, but markets are waiting for an improvement in the key figures.

NZD/USD levels to watch

The Kiwi is looking set to decline in Monday’s action, as risk appetite continues to muddle on global geopolitical tensions, and the NZD is unlikely to find much support for the new week with NZ traders enjoying a long weekend. The pair is shifting back into major support at last week’s low of 0.6880, and a continued sell-off will see further support from May’s low of 0.6850 before the final barrier of late November’s bottom at 0.6780, while bulls will have to deal with Friday’s high near 0.7025 and the 50-day moving average near 0.7050.