- NZD/USD staged a goodish intraday bounce from near two-week lows on Monday.
- The emergence of some fresh USD selling remained supportive of the positive move.
- The risk-off environment kept a lid on any strong gains for the perceived riskier kiwi.
The NZD/USD pair built on its steady intraday recovery move from near two-week lows and was last seen trading near session tops, around the 0.6450-55 region.
The pair managed to find some support near the 0.6380 region and for now, seems to have stalled its recent corrective slide from 4-1/2-month tops set last Tuesday. The emergence of some fresh US dollar selling was seen as one of the key factors behind the NZD/USD pair’s intraday bounce of around 70-75 pips.
Concern over a resurgence of coronavirus cases and the possibility of renewed lockdowns to curb the spread dampened prospects for a sharp V-shaped economic recovery. This, in turn, took its toll on the global risk sentiment and led to some follow-through slide in the US Treasury bond yields, which undermined the USD demand.
The USD bulls remained on the defensive and largely shrugged off the release of better-than-expected Empire State Manufacturing Index. In fact, the gauge improved to -0.2 for June as compared to -27.5 anticipated and -48.5 previous.
The offered tone surrounding the USD turned out to be an exclusive driver of the pair’s momentum, though the prevalent risk-off environment might keep a lid on any runaway rally for the perceived riskier kiwi. This makes it prudent to wait for some strong follow-through buying before positioning for any further gains.
Technical levels to watch
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