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  • NZD/USD stages a solid intraday bounce amid some renewed USD weakness.
  • The upbeat market mood now seemed to undermine the safe-haven greenback.
  • A sustained move beyond 0.6500 mark will be seen as a fresh trigger for bulls.

The NZD/USD pair built on its intraday recovery move from 1-1/2-week lows and jumped to fresh daily tops, around the 0.6465 region in the last hour.

The pair staged a goodish intraday bounce on the last trading day of the week and has now recovered 80-85 pips from sub-0.6400 level touched during the Asian session. The uptick was sponsored by a combination of factors, including the upbeat market mood and a subdued US dollar price action.

Despite the previous day’s selloff in the global equity markets, led by a resurgence of coronavirus infections and a cautious outlook from the Fed, investors remain bullish about the prospects of a strong economic recovery. The confidence was evident from a strong recovery in the equity markets.

The risk-on flow was seen as one of the key factors that benefitted perceived riskier currencies, like the kiwi, and undermined the greenback’s perceived safe-haven status. In fact, the USD struggled to capitalize on the overnight strong gains and provided an additional boost to the NZD/USD pair.

The pair has now recovered a part of the previous day’s negative move and for now, seems to have stalled this week’s corrective slide from the highest level since late January. However, any subsequent move up is likely to confront a stiff resistance near the key 0.6500 psychological mark.

Hence, it will be prudent to wait for a sustained move back above the mentioned level before traders start positioning for the resumption of the pair’s bullish trajectory. The NZD/USD pair might then surpass the recent swing highs, around the 0.6580-85 zone, and aim to reclaim the 0.6600 mark.

Moving ahead, market participants now look forward to the release of the preliminary June Michigan Consumer Sentiment Index from the US. The data, along with the broader market risk sentiment might influence the USD price dynamics and produce some trading opportunities on the last day of the week.

Technical levels to watch


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