NZD/USD pulls away from multi-year tops, holds above 0.7100

• NZD/USD started the new week on strong footing.
• US Dollar Index retreats to 90.50 area on Monday.
• Wall Street’s main indexes look to open decisively higher.

The NZD/USD pair closed the previous week in the positive territory and preserved its bullish momentum on Monday. After climbing to its highest level since April 2018 at 0.7120, however, the pair seems to have gone into a consolidation phase and was last seen gaining 0.53% on the day at 0.7107.

Risk flows dominate financial markets on Monday

The upbeat market mood and the broad-based selling pressure surrounding the greenback seems to have fueled NZD/USD’s upside at the start of the week.

Renewed Brexit optimism provided a boost to major European equity indexes on Monday and helped risk-sensitive currencies find demand. Confirming the upbeat market mood, the S&P 500 Futures are up nearly 0.7% on the day, suggesting that Wall Street’s main indexes are likely to start the day decisively higher.

In the meantime, the US Dollar Index is edging lower toward 90.50 as the greenback struggles to attract investors as a safe-haven. There won’t be any macroeconomic data releases from the US in the remainder of the day and the USD could find it difficult to stage a recovery against its major rivals. 

In the early trading hours of the Asian session on Tuesday, Westpac New Zealand will release its Consumer Survey for the fourth quarter.

Technical levels to watch for