• Renewed USD selling pressure helps regain positive traction at the start of a new week.
• Fresh US-China trade tensions might now turn out to be the only factor capping gains.
The NZD/USD pair held on to its positive tone through the early North-American session, with bulls now eyeing a move further beyond the 0.6900 handle.
After last week’s late pull-back from over 1-1/2 month tops, the pair managed to regain some positive traction at the start of a new trading week and was being supported by some renewed US Dollar selling pressure.
In fact, the buck stalled its recent recovery from the post-FOMC swing low to the lowest level since early Feb. and snapped two consecutive days of winning streak amid the recent inversion of the 3m-10yr US bond yield curve.
However, fresh jitters from the US-China trade front might help limit further USD weakness and might turn out to be the only factor keeping a lid on any strong follow-through up-move for the major, at least for the time being.
In absence of any major market moving economic releases, the USD price dynamics might continue to act as an exclusive driver of the pair’s momentum through the US trading session on Monday.
Technical levels to watch
On a sustained move beyond the 0.6900 handle, the pair is likely to accelerate the up-move back towards challenging the 0.6935-40 supply zone before eventually aiming to test Dec. 2018 swing highs, around the 0.6970 region. On the flip side, the 0.6870 level now seems to protect the immediate downside, which if broken might accelerate the slide further towards the 0.6830 intermediate support en-route the 0.6800 round figure mark.