- NZD/USD regained positive traction on Friday, albeit lacked any strong follow-through buying.
- The risk-on impulse benefitted the perceived riskier kiwi and remained supportive of the uptick.
- A pickup in the US bond yields underpinned the USD and capped gains amid COVID-19 jitters.
The NZD/USD pair maintained its bid tone through the early European session, albeit has retreated few pips from daily tops and was last seen trading around the 0.6970 region.
Following the previous day's modest slide, the NZD/USD pair managed to regain some positive traction on the last day of the week and touched a four-day high level of 0.6989. The risk-on impulse – as depicted by a generally positive tone around the equity markets – was seen as a key factor that extended some support to the perceived riskier kiwi.
Meanwhile, worries about the economic fallout from the spread of the highly contagious Delta variant of the coronavirus acted as a tailwind for the safe-haven US dollar. Apart from this, a goodish pickup in the US Treasury bond yields further underpinned the greenback. This, in turn, kept a lid on any meaningful upside for the NZD/USD pair, at least for now.
Hence, it will be prudent to wait for some strong follow-through buying before positioning for an extension of this week's recovery move from the 0.6880 region, or the lowest level since November 2020. Market participants now look forward to the US economic docket, featuring the release of the flash PMI prints for some meaningful trading impetus.
This, along with the US bond yields, will influence the USD price dynamics. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities around the NZD/USD pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Strong resistance lies at 0.6300
The marked sell-off in the US Dollar allowed AUD/USD to regain strong upside traction and reach multi-day highs in the area just below the key 0.6300 barrier at the beginning of the week.
EUR/USD: Bulls need to clear 1.0400 on a convincing fashion
In line with the rest of the risk-associated complex, EUR/USD managed to regain marked buying pressure and flirted with the area of three-week highs around 1.0430 on Monday.
Gold remains focused on all-time highs
Gold stays in positive territory above $2,700 on Monday as the improving risk mood makes it difficult for the US Dollar to find demand. Markets await US President Donald Trump's speech at the inauguration ceremony.
Solana Price Forecast: Are US traders dumping Bitcoin and XRP for SOL?
Solana (SOL) price stabilized near the $250 support level on Monday, having declined 10% from its all-time high over the last 24 hours.
GBP/USD stays defensive below 1.2200, awaits Trump 2.0
GBP/USD struggles to gain traction and trades slightly below 1.2200 in the second half of the day on Monday. Markets' nervousness ahead of US President-elect Donald Trump's inauguration drag the pair lower despite a broadly weaker US Dollar.
Trusted Broker Reviews for Smarter Trading
VERIFIED Discover in-depth reviews of reliable brokers. Compare features like spreads, leverage, and platforms. Find the perfect fit for your trading style, from CFDs to Forex pairs like EUR/USD and Gold.