NZD/USD on a retreat from 10-month tops, risk-off weighs

The NZD/USD pair kicked-off the week on a weaker note, having stalled its four-day rally, as the bulls take a breather heading into the FOMC week.

NZD/USD: Will it take-out 0.7460?

The spot is seen extending its retreat from multi-month tops amid ongoing recovery seen in the US dollar versus its main competitors, while persisting risk-off trades on the back of negative Asian equities and subdued oil prices, also weighs down on the sentiment around the higher-yielding currency Kiwi.

The downside, however, appears to lack follow-through as the recent upbeat remarks from the NZ Finance Minister Joyce continue to remain NZD-supportive.  NZD at current levels reflect a strong economy.

Moreover, lingering uncertainty surrounding the US political scenario could also keep a check on the USD recovery, as markets continue to remain concerned over the Trump administration and its ability to deal with reforms.

Markets now await the US manufacturing PMI release, existing homes sales data for fresh impetus on the major ahead of NZ trade figures and the crucial FOMC policy decision.

NZD/USD Levels to consider                                                                              

NZD/USD holds well above 0.7400, with a test of 0.7461 (multi-month highs) still on the cards, which could open doors towards.7500 (psychological levels). To the downside lies 0.7421 (5-DMA) still guarding 0.7380 (10-DMA) and a break back below 0.7330 (20-DMA) are key near-term downside areas.