- NZD/USD erased a portion of its daily losses during the American session.
- US Dollar Index remains on track to close the third straight day lower.
- Wall Street’s main indexes trade deep in the red.
The NZD/USD pair started the new week on the back foot and dropped to a daily low of 0.7182 before staging a recovery in the second half of the day. As of writing, the pair was losing 0.52% on a daily basis at 0.7217.
DXY loses traction
Earlier in the day, the disappointing data from China and the risk-averse market environment made it difficult for the kiwi to find demand. Retail Sales in China increased by 17.7% in April, compared to analysts’ estimate of 24.9%, and major equity indexes in Asia closed the day sharply lower.
During the American session, the greenback lost some interest and allowed NZD/USD to erase a portion of its daily decline. The US Dollar Index (DXY), which advanced to a daily high of 90.42, was last seen at 90.15, where it was down 0.17% on a daily basis.
Meanwhile, the S&P 500 and the Nasdaq Composite indexes are down 0.4% and 1%, respectively, limiting NZD/USD’s upside for the time being.
The only data from the US revealed on Monday that the NY Fed’s Empire State Manufacturing Index declined to 24.3 in May from 26.3 in April but it was largely ignored by market participants. There won’t be any significant macroeconomic data releases from New Zealand on Tuesday and risk perception is likely to continue to drive the pair’s action.
Technical levels to watch for
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