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   “¢   The ongoing recovery from multi-month lows remains capped amid a modest USD uptick.
   “¢   Stronger US spending data provides an additional boost to the greenback and keeps a lid.
   “¢   Focus remains on the latest FOMC update on Wednesday and Friday’s release of the NFP.

The NZD/USD pair extended its sideways consolidative price action and remained below the 0.6680 supply zone, retested earlier today.  

The pair continued gaining positive traction for the third consecutive session and built on last week’s late rebound from near six-month lows, albeit a modest US Dollar uptick kept a lid on any strong follow-through up-move.

The greenback managed to find some buying in wake of a mildly positive tone around the US Treasury bond yields and got an additional boost after the March PCE report showed a surprisingly stronger personal spending data, largely offsetting the disappointment from personal income.

Meanwhile, softer inflation data was in sync with Friday’s GDP report and hence, did little to provide any meaningful impetus, albeit reinforced expectations that the Fed will stick to its cautious stance.

This coupled with growing optimism over a possible US-China trade deal might continue to extend some additional support to perceived riskier currencies – like the Kiwi and help limit any deeper corrective slide.

It, however, remains to be seen if the pair is able to capitalize on the positive move or runs into some fresh supply at higher levels as market participants start repositioning for this week’s key event/data risks.  

The Fed is scheduled to announce its latest monetary policy update on Wednesday, which followed by the keenly watched US monthly jobs report (NFP) on Friday will assist investors to determine the pair’s near-term trajectory.  

Technical levels to watch

The 0.6680-90 region might continue to act as an immediate resistance, above which the pair is likely to aim towards testing the very important 200-day SMA, around the 0.6725-30 region. On the flip side, the 0.6650 region now seems to protect the immediate downside, which if broken might turn the pair vulnerable to accelerate the side back towards testing sub-0.6600 level.