NZD/USD Recovers to 0.6950 as Oil Turns Positive

NZD/USD Recovers to 0.6950 as Oil Turns Positive

7 June 2016, 10:52
Roberto Jacobs
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NZD/USD Recovers to 0.6950 as Oil Turns Positive

The recovery in NZD/USD from below 0.69 handle gained further traction post-European open, as risk-on trades intensified amid rebounding European stocks and oil prices.

NZD/USD trades above all major DMAs

Currently, the NZD/USD pair rises +0.23% to 0.6937, having posted fresh session highs of 0.6943 in the last hour. The Kiwi extended its recovery mode well beyond 5-DMA (0.6911) as the bulls cheered renewed strength in the oil prices, which translated into a strong rebound in the European equities, and therefore, boosted the demand for higher-yielding currency such as the NZD.

Adding to the positive sentiment around the bird, the US dollar came under fresh selling pressure against its major peers, while a slightly upbeat NZ treasury report earlier on the day also underpinned the Kiwi.

Furthermore, strong gains seen in the AUD/USD pair on the back of steady policy kept by the RBA, also drove its Antipodean partner higher. Looking ahead, markets now await the RBNZ policy decision due on Thursday amid a data-quiet US macro calendar this week.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6952/64 (Jun 6 high/ 4-week high), above which it could extend gains to 0.7000 (psychological levels). To the downside immediate support might be located at 0.6846 (50-DMA) and from there to at 0.6822/0.6797 (10-DMA/ 1h 200-SMA).


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