NZD/USD retreats to 0.7200, stays in the positive territory

• NZD/USD climbed to fresh multi-week highs on Tuesday.
• US Dollar Index stays relatively quiet around 91.00.
• Wall Street’s main indexes look to open lower.  

After closing the first day of the week in the positive territory, the NZD/USD pair preserved its bullish momentum and touched its highest level in more than a month at 0.7230. With the market mood turning sour during the European trading hours, however, the pair lost its traction and retreated to 0.7200, where it was still up 0.28% on the day.

USD selloff pauses ahead of American session

The broad-based selling pressure surrounding the greenback fueled NZD/USD’s rally. Earlier in the day, the US Dollar Index slumped to its lowest level since early March at 90.85 as US Treasury bond yields continued to have a difficult time staging a convincing rebound.  

However, the risk-averse market environment, as reflected by the poor performance of major European equity indexes and the US stocks futures, allowed the USD started to find demand and show resilience against its rivals. At the moment, the DXY is virtually unchanged on a daily basis at 91.08.

In the meantime, the S&P 500 Futures are down 0.5%, suggesting that the buck gather additional strength in the second half of the day with safe-haven flows dominating the financial markets.  

There won’t be any macroeconomic data releases featured in the US economic docket. On Wednesday, first-quarter Consumer Price Index (CPI) data from New Zealand will be looked upon for fresh impetus.

Technical levels to watch for