After touching its session high at 0.6920, the NZD/USD pair’s bullish momentum weakened a little and the pair edged lower towards 0.69. As of writing, the pair was trading at 0.6910, gaining 0.57%, or 40 pips, on the day.
The recent USD weakness is seen as the primary catalyst on the pair’s upsurge witnessed on Friday. The greenback couldn’t take advantage of the latest macro data from the United States, which revealed a better-than-expected nonfarm payroll growth in April. Following the data, expectations for a June rate hike strengthened with the CME Group FedWatch suggesting that the market was pricing a probability of 83.1%. Following the data, the US Dollar Index dropped to its six-month low at 98.47 and found support there. At the moment, the index is down 0.03%, at 98.60.
On the other hand, the strong performance of commodities, led by the gains in crude oil prices, supported the commodity-linked NZD. Following the data, investors turned their attention to Fed speakers. Fed’s Vice Chair S.Fischer and San Francisco Fed’s J.Williams didn’t comment on the monetary policy nor the recent state of the economy. Boston Fed’s E.Rosengren and Chicago Fed’s Charles Evans are up next.
Technical levels to watch
The pair could encounter the initial support at 0.6900 (psychological level) ahead of 0.6840 (10-month low/May 4 low) and 0.6800 (psychological level). To the upside, resistances align at 0.6975 (50-DMA), 0.7000 (psychological level) and 0.7075 (100-DMA).