- NZD/USD lost its traction after rising above 0.7050.
- US Dollar Index stages modest rebound in early American session.
- Wall Street looks to start the day in the negative territory.
The NZD/USD started the new week on a firm footing and climbed to its highest level since June 2018 at 0.7052. With the greenback starting to find some demand ahead of the American session, the pair lost its bullish momentum and was last seen gaining 0.18% on the day at 0.7035.
DXY recovers modestly
The broad-based USD weakness allowed NZD/USD to push higher on Monday. In the absence of significant fundamental drivers, the US Dollar Index (DXY) extended last week’s slide and touched its lowest level in 32 months at 91.55.
However, renewed concerns over the EU and the UK failing to reach a trade deal helped the greenback gather strength against its rivals and forced NZD/USD to reverse its direction. At the moment, the DXY is down 0.13% on the day at 91.65.
Later in the session, the ISM Chicago’s PMI, the Federal Reserve Bank of Dallas’ Manufacturing Business Index and Pending Home Sales data from the US will be looked upon for fresh impetus. There won’t be any macroeconomic data releases from New Zealand on Tuesday.
Meanwhile, the S&P 500 Futures are down 0.25% on the day. Month-end flows could cause major equity indexes to fall sharply and help the USD gather additional strength in the second half of the day.
Technical levels to watch for
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