NZD/USD gains further beyond 0.6800 handle, multi-day tops

   “¢   Dismal Chinese macro data-led early downtick turns out to be rather short-lived.
   “¢   The USD remains supported by positive US bond yields and might cap strong gains.
   “¢   Traders now eye today’s release of US monthly retail sales data for fresh impetus.

After an initial dip to 0.6785 area, the NZD/USD pair regained positive traction and was now seen building on Friday’s goodish bounce from the very important 200-day SMA.

With investors looking past Friday’s disappointment from the headline NFP print, the pair opened with a modest bearish gap at the start of a new trading week and was being weighed down by disappointing Chinese macro data released over the weekend.

The downtick, however, turned out to be short-lived, rather caught some fresh bids and the pair subsequently recovered over 30-pips from Asian session lows. The pair climbed to multi-day tops, around the 0.6820 region, albeit seemed to lack any strong follow-through.

Meanwhile, a goodish pickup in the US Treasury bond yields extended some support to the US Dollar and might turn out to be the only factors that might keep a lid on meaningful positive momentum/cap gains, at least for the time being.

Hence, it would be prudent to wait for a strong buying interest before confirming that the pair might have already bottomed out in the near-term and positioning for any further up-move as the focus now shifts to the release of the US monthly retail sales data.

Apart from this, a slew of other US macroeconomic releases – including the latest consumer inflation figures on Tuesday and durable goods orders data on Wednesday, might further collaborate towards determining the pair’s next leg of a directional move.

Technical levels to watch