NZD/USD struggles to capitalize on its modest intraday bounce, remains below 0.6000 mark – Crypto News – Crypto News
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Bulls attack 12-day-old resistance below 0.6200 Bulls attack 12-day-old resistance below 0.6200

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NZD/USD struggles to capitalize on its modest intraday bounce, remains below 0.6000 mark – Crypto News

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  • NZD/USD fills a modest weekly bearish gap opening, though the upside potential seems limited.
  • Geopolitical tensions benefit the safe-haven USD and act as a headwind for the risk-sensitive Kiwi.
  • The uncertainty over the Fed’s rate-hike path caps the USD upside and lends support to the major.

The NZD/USD pair attracts some buyers near the 0.5960 region during the Asian session on Monday and fills a modest weekly bearish gap opening, albeit lacks follow-through. Spot prices remain below last week’s swing high – levels beyond the 0.6000 psychological mark – and for now, seem to have snapped a three-day winning streak.

The global risk sentiment takes a hit in reaction to a Hamas attack on Israel over the weekend, which, in turn, is seen lending some support to the safe-haven US Dollar (USD) and acting as a headwind for the risk-sensitive Kiwi. The Hamas militant group in Gaza, Palestine, attacked Israeli towns in an unprecedented move on Saturday. In response, Israel launched airstrikes on Gaza and declared war against the Palestinian enclave of Gaza on Sunday, resulting in hundreds of casualties on both sides.

The USD, however, lacks bullish conviction as market participants prefer to wait for more cues about the Federal Reserve’s (Fed) future rate hike path. The US NFP report released on Friday showed that the economy added 336K jobs in September, higher than market estimates and the previous month’s upwardly revised reading of 227 K. The data reaffirms bets for at least one more Fed rate hike by the year-end, which remains supportive of elevated US Treasury bond yields and underpins the USD.

Additional details of the report, however, revealed that wage growth remained moderate during the reported month, easing inflationary concerns, which could allow the Fed to soften its hawkish stance. Hence, investors now look to the FOMC meeting minutes, due on Wednesday, followed by the latest US consumer inflation figures on Thursday. This will drive expectations about the Fed’s next policy move and drive the USD demand, providing a fresh directional impetus to the NZD/USD pair.

In the meantime, the broader market risk sentiment will continue to influence the USD price dynamics in the absence of any relevant macro data and a bank holiday in the US. Later during the early North American session, traders will take cues from speeches by Fed officials. The aforementioned fundamental backdrop, meanwhile, warrants caution before positioning for an extension of the NZD/USD pair’s bounce from a near one-month low, around the 0.5870 area touched last week.

Technical levels to watch

 

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