- A combination of factors helps the NZD / USD gain strong continuation traction on Tuesday.
- Diminishing expectations of a Fed rate hike weigh on the USD and support the pair’s upward move amid risk appetite sentiment.
- The focus of the market’s attention now shifts to the release of New Zealand’s quarterly inflation report, to be released on Wednesday.
The pair NZD / USD continues to move higher during the European session on Tuesday, reached new month-long highs around the 0.7225-30 region.
The pair has extended the positive move from the previous day and gained strong continuation traction for the second day in a row on Tuesday. The US dollar remains weak near multi-week lows amid speculation the Fed will keep interest rates near zero for a longer period. This, in turn, has been seen as a key factor driving the NZD / USD pair higher.
Apart of this, the underlying bullish tone in financial markets has further weighed on the safe-haven US dollar and benefited the higher perceived risk NZDD. Even a good rally in US Treasury yields has done little to impress USD bulls or hinder the continued momentum of the NZD / USD pair to the highest level since March 18.
Tuesday’s positive move could also be attributed to some technical buying following sustained strength above the round 0.7200 level. With the latest move up, the NZD / USD pair has risen nearly 300 pips from monthly lows and appears poised to extend its upward trajectory amid the absence of relevant economic releases from the US.
Therefore, the focus and attention now shifts to New Zealand’s quarterly inflation figures, to be released on Wednesday. The report comes amid signs that price pressures have been mounting domestically and abroad. A warmer than expected reading could force the RBBZ to reconsider its ultra-flexible policy, which should be enough to provide an additional boost to the NZD / USD pair.
NZD / USD technical levels
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