NZD / USD capped below 0.7000 level

  • The renewed buy around the USD does not help the NZD / USD to take advantage of the positive movement of the previous day.
  • The Fed’s bullish turn and the rally in US bond yields act as a tailwind for the USD.
  • The positive risk tone helps limit the decline in the NZD of higher perceived risk.

The pair NZD / USD moves lower during the European session on Tuesday, moving within a range below the 0.7000 level. At time of writing, the pair is recovering slightly from intraday lows of 0.6963.

The pair has struggled to capitalize on the previous day’s recovery move from the lowest level since November 2020 and has witnessed subdued price action during the first half of trading action on Tuesday. The US dollar has strengthened and remained supported by the surprise optimistic turn of the Fed last week. Aside from this, a certain rally in US Treasury yields has acted as a tailwind for the USD, limiting the NZD / USD pair below the key psychological level of 0.7000.

Meanwhile, St. Louis Fed Chairman James Bullard said Monday that the Fed should be prepared for inflation to surprise to the upside until next year. Additionally, Fed Chairman Jerome Powell, in prepared testimony for the Congressional hearing, also highlighted rising inflationary pressures. This, in turn, pushed the benchmark 10-year US government bond yield closer to the 1.50% level, which is another factor that benefits the US dollar.

Having said that, a positive tone around the stock markets global markets has prevented investors from opening aggressive bullish positions around the safe-haven USD and has helped limit NZD losses of higher perceived risk. The NZD / USD pair has drawn some buying near the 0.6965-60 region, although any significant drops still seem elusive ahead of Fed Chairman Jerome Powell’s testimony later this Tuesday before the House Select Subcommittee on the Crisis. of the coronavirus.

Meanwhile, the US economic calendar, which includes second-tier releases of the Existing Home Sales Index and the Richmond Fed Manufacturing Index, could generate some momentum in the near term. Investors could continue to take cues from US bond yields and broader market risk sentiment. This could influence the USD price dynamics and generate some opportunities around the NZD / USD pair.

NZD / USD technical levels

.

You may also like

Whales switched to Ethereum
Top News
David

Whales switched to Ethereum

Ethereum showed himself better than most assets in a recent sale. Token tested the level of $ 4,300, but quickly