ND/USD moves back closer to monthly tops, around 0.7220-25 region
- ND/USD gains strong positive traction for the second consecutive session on Monday.
- A pickup in the US bond yields extended some support to the USD and might cap gains.
- Investors eye US Durable Goods Orders for some impetus ahead of the FOMC meeting.
The NZD/USD pair continued scaling higher through the first half of the European session and climbed to four-day tops, around the 0.7220-25 region in the last hour.
Firming market expectations that the Fed will keep interest rates near zero levels dragged the US dollar to fresh multi-week lows on Monday. This, in turn, assisted the NZD/USD pair to gain strong follow-through traction for the second consecutive session and build on the previous session's bounce from 100-day SMA.
That said, a goodish pickup in the US Treasury bond yields helped limit any further losses for the greenback, at least for the time being. This, along with a cautious mood around the equity markets, might act as a headwind for the perceived riskier kiwi and keep a lid on any further gains for the NZD/USD pair.
Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders data for some impetus later during the early North American session. The key focus, however, will remain on the latest FOMC monetary policy decision, scheduled to be announced during the US session on Wednesday.
In the meantime, the US bond yields might influence the USD price dynamics and provide some impetus to the NZD/USD pair. Apart from this, the broader market risk sentiment will also be looked upon for some short-term trading opportunities.
Looking at the technical picture, the emergence of some dip-buying on Friday and a sustained move back above the 0.7200 mark has shifted the bias back in favour of bullish traders. A subsequent move beyond the 0.7230 region, or one-month tops touched last week will reaffirm the positive outlook and set the stage for additional gains.
Technical levels to watch