NZD/USD flat-lined around 0.6465-70 region ahead of Powell’s testimony
- NZD/USD reversed an early dip to 0.6435 region, albeit lacked any strong follow-through.
- A strong pickup in the US bond yields helped ease the bearish pressure surrounding the USD.
- The intraday USD uptick got an additional boost from stronger-than-expected US retail sales.
- Investors now look forward to the Fed Chair Jerome Powell’s testimony for a fresh impetus.
The NZD/USD pair struggled to capitalize on its intraday bounce of around 55-60 pips and remained below the key 0.6500 psychological mark through the early North American session.
The global risk sentiment remained well supported by the Fed's announcement on Monday that it will start purchasing a diversified range of investment-grade US corporate bonds to ensure credit market liquidity. Adding to this, report that the Trump administration was contemplating a $1 trillion infrastructure spending further boosted investors' confidence.
The risk-on mood extended some support to perceived riskier currencies, like the kiwi, and assisted the NZD/USD pair to reverse a mid-European session dip to the 0.6435 region. However, a goodish intraday US dollar rebound, backed by a strong pickup in the US Treasury bond yields, kept a lid on any strong follow-through gains for the major.
The intraday USD uptick got an additional boost following the release of stronger-than-anticipated US monthly retail sales. According to the report, the headlines sales recorded a growth of 17.7% in May and the previous monthly reading was also revised higher to show a fall of 14.7% as against 16.4% decline reported previously.
Meanwhile, figure excluding autos rose 12.4% as against 5.5% growth anticipated and the closely watched Retail Sales Control Group also surpassed estimates, climbing 11% to reverse a major part of April's upwardly revised fall of 12.4%. This comes ahead of the Fed Chair Jerome Powell's testimony and seemed to have prompted some USD short-covering bounce.
The pair was last seen trading in the neutral territory, around the 0.6465-70 region, making it prudent to wait for a sustained move in either direction before positioning for any meaningful intraday trading opportunities.
Technical levels to watch