- Kiwi’s reversal from 0.0.6980 high has found support at 0.6955.
- The pair maintains its near-term positive tone amid broad-based USD weakness.
- NZD/USD remains close to 0.7000 resistance area.
The New Zealand dollar’s rejection at the 0.7000 area, seen during Monday’s earlier US trading session, has been contained above 0.6950. The pair maintains its positive tone from 0.6860 lows seen last week.
The kiwi advances further against a softer USD
The overall softer tone observed on the US dollar has fueled the kiwi to extend its rally during Monday’s London session and crawl towards fresh one-week highs at 0.6980. With the Chinese and the South Korean markets closed for bank holidays, the investors have been focusing on the US while last week’s concerns about the potential consequences of Evergrande’s debt crisis and energy shortages on the world’s second economy have taken a back seat for the benefit of the NZD.
Traders are cautious about placing substantial US dollar bets on Monday, awaiting the release of September’s Labour report, due on Friday. This is expected to clarify the Federal Reserve’s next step. Investors anticipate that strong employment figures will convince the US Central Bank to start rolling back its bonds purchasing program in November.
NZD/USD: Consolidating below 0.7000 resistance area
At the moment, the pair remains steady with the 0.7000 resistance area at a short distance. Confirmation above here might reinforce the near-term bullish bias, and push the pair towards 0.7030 (September 27 high) and 0.7090 (September 23 high).
On the downside, the immediate support area remains at 0.6950. A further retreat might find support at intra-day low 0.6925 before a re-test of September lows at 0.6870.