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  • NZD/USD remained confined in a range through the first half of the trading action on Monday.
  • Upbeat Chinese PMIs boosted investors’ confidence and extended some support to the pair.
  • Coronavirus jitters might cap any meaningful move up ahead of the US presidential election.

The NZD/USD pair lacked any firm directional bias and seesawed between tepid gains/minor losses, around the 0.6600 mark through the early European session.

Upbeat Chinese macro data boosted investors’ confidence on the first day of a new trading week, which, in turn, was seen as one of the key factors lending some support to the perceived riskier kiwi. However, growing market worries about the potential economic fallout from the imposition of fresh COVID-19 restrictions in Western countries kept a lid on any meaningful upside for the NZD/USD pair.

On the other hand, the US dollar struggled to capitalize on its recent strong move up, instead was seen consolidating near one-month tops amid the uncertain US political environment. National opinion polls have been indicating a clear lead for Democratic challenger Joe Biden. Investors, however, remain wary of predicting the actual outcome as the gap is narrow in key battleground states.

This, in turn, might continue to hold traders from placing any aggressive directional bets and led to a subdued/range-bound price action through the first half of the trading action on Monday. That said, the NZD/USD pair’s inability to gain any meaningful traction favours bearish traders and supports prospects for an extension of last week’s pullback from over one-month tops.

Moving ahead, market participants now look forward to the release of the US ISM Manufacturing PMI for some short-term trading impetus. The data, along with developments surrounding the coronavirus saga will influence the USD price dynamics, though is unlikely to be a major game-changer as the key focus remains on Tuesday’s US presidential election.

Technical levels to watch