NZD/USD heavy on risk-off, USD bounce, eyes on China data dump
- USD rebounds in Asia.
- NZ politics will remain in focus.
- China data dump on tap.
Having met fresh sellers in early Asia, the NZD/USD pair entered a phase of consolidation, meandering near daily lows of 0.6916, in the wake of resurgent USD demand and risk-off market profile.
NZD/USD looks to test 0.6900?
The US dollar attempted a bounce across its main competitors, following last week’s sell-off induced by the US tax reforms uncertainty, which triggered a reversal in the Kiwi from near 0.6940 levels. The renewed uptick seen in the greenback was mainly driven by broad GBP selling, as the markets reacted to the weekend news on UK May’s leadership.
Moreover, persisting risk-off moods across the financial markets in Asia on the back of the renewed troubles brewing up around the US and UK political environment, weighed down on the risk assets such as the Asian equities, Treasury yields, and NZD.
Looking ahead, the pair will keep a close watch on the NZ politics amid a lack of key fundamental news from New Zealand. Meanwhile, a raft of the US economic releases will also remain in focus this week.
NZD/USD Levels to consider
The NZD remains supported above 0.6908/00 (20-DMA/ round number), below which 0.6875 (Nov 6 low) and 0.6850/42 (psychological levels/ Nov 1 low) are key near-term downside areas. To the topside, a test of 0.6938 (5-DMA) due on the cards, which could open doors towards 0.6981/75 (intermittent tops).