- The NZD / USD makes a correction after posting strong gains last week.
- The US Dollar Index remains in positive territory above 92.20.
- Trade action is likely to remain subdued due to the US Labor Day holiday.
The pair NZD / USD it gained more than 150 pips last week, but struggled to preserve its bullish momentum on Monday. At time of writing, the pair was down 0.25% on the day at 0.7142.
DXY bounces on a quiet day
On Friday, the disappointing US employment report, which showed non-farm payrolls increased by just 235,000 in August, triggered a dollar sell-off and allowed the NZD / USD to rise to its strongest level since the beginning of June. at 0.7171. However, the US Dollar Index (DXY) is experiencing a rally at the beginning of the week, forcing the NZD / USD to pull back on its rally. Currently, the DXY is up 0.17% on the day at 92.27.
However, the lack of release of high-level macro data and fundamental developments suggests that the DXY rebound is a technical correction. Additionally, trading action is expected to remain subdued for the remainder of the day with US markets closed due to the Labor Day holiday.
On Tuesday, the Reserve Bank of Australia (RBA) will announce its Interest Rate Decision and publish the Rate Statement. A strong reaction in the positively correlated AUD / USD pair could affect the movements of the NZD / USD during Asian trading hours.
Technical levels
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