NZD/USD begins the week on a back foot around 0.6760
- Fed’s effort to calm the bears received major market pleased the USD buyers.
- Uncertainty surrounding the US-China trade deal, lack of major data/events also hurt the Antipodeans.
With the US Dollar (USD) holding its previous strength, the NZD/USD pair remains on a back foot around 0.6760 at the start of Monday’s trading session in Asia.
The kiwi pair pared gains on Friday after the Fed officials’ effort to tame market expectations of a 50 basis points (bps) rate cut got good response ahead of the July meeting by the Federal Open Market Committee (FOMC).
Adding to the pair’s pullback was the uncertainty surrounding the US-China trade deal. Despite announcing a trade truce, the world’s two largest economies are still far from any deal and the Antipodeans remain compressed on it.
Further, there were no major data/events up during the weekend, not there is/are any, which in turn forces the traders to follow the recent trend. However, few position headlines have started flowing from the trade front wherein China is preparing to purchase more of the US agricultural products, as per Chinese media.
Looking forward, given the absence of catalysts, the pair traders might keep a tab on news headlines for fresh impulse.
The overbought conditions of 14-day relative strength index (RSI), coupled with the quote’s U-turn from 61.8% Fibonacci Retracement of December 2018 to May 2019 downpour, increases the odds the pair’s additional declines to July 17 high around 0.6750. Though, 50% Fibonacci retracement and 200-day exponential moving average (EMA) can limit the pair’s further declines around 0.6725 and 0.6715 respectively.
Meanwhile, an upside clearance of 0.6780 resistance comprising 61.8% Fibonacci retracement can further propel the quote towards 0.6800 round-figure that holds the key for the extended rise in the direction to April month high close to 0.6840.