FX

NZD/USD drops below 0.7200 on US dollar rebound

  • NZD/USD refreshes intraday low amid a quiet Asian session.
  • US dollar consolidates the previous day’s losses amid pick-up in 3-year Treasury yields.
  • Israel-Palestine peace accord helps extend Wall Street gains, pre-PMI mood probe bulls.

NZD/USD takes offers around 0.7180, down 0.24% intraday, as sellers retake control during early Friday. Amid a lack of major catalysts at home, the kiwi pair follows AUD/USD moves and US Treasury yields for fresh impulse.

That said, AUD/USD drops 0.28% to refresh intraday low with 0.7752 by the press time. In doing so, the Aussie pair struggles to justify April’s upbeat preliminary Retail Sales for Australia amid mixed PMI figures from Commonwealth Bank for May. Other than the mixed data, Aussie fears from China’s Huawei 5G also seem to back the pair sellers.

On the other hand, the US 10-year Treasury yields remain directionless near 1.63% but the 3-year counterpart is on the way to post second weekly gains, around 0.33% by the press time.

US dollar index (DXY) takes clues from Treasury moves while consolidating the previous day’s losses, which in turn exert additional downside pressure on the NZD/USD prices.

It should be noted that earlier in Asia, New Zealand (NZ) Finance Minister Grant Robertson reiterated the wish to return to a “fiscally viable position” while also saying that a relationship with China is very important.

Amid these plays, S&P 500 Futures print mild gains and the stocks in Asia also refrain from catering bears, which in turn portrays a cautious optimism.

With a light calendar and dead feeds, NZD/USD traders may keep their eyes on the US PMIs amid hopes of witnessing another risk-on session during the US trading day.

Technical analysis

NZD/USD remains trapped inside a 100-pips area above 0.7150, forming a short-term triangle, with a 50-day SMA near 0.7140 acting as an additional downside filter.

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