NZD/USD sticks to gains near multi-week high, just below 100-DMA ahead of NFP

 

  • NZD/USD attracted fresh buying on Friday and rallied to the highest level since January 14.
  • Strong rally in commodity prices continued acting as a tailwind for the resources-linked kiwi.
  • Geopolitical tensions boosted the safe-haven USD, though did little to hinder the momentum.
  • Traders now eye NFP for a fresh impetus, though the focus remains on the Russia-Ukraine saga.

The NZD/USD pair maintained its bid tone heading into the North American session and was last seen trading around the 0.6825 region, just a few pips below the seven-week high.

Following an early slide to the 0.6770-0.6765 region, the NZD/USD pair attracted fresh buying on Friday and prolonged its bullish trajectory witnessed over the past one month or so. The New Zealand dollar continued drawing support from the recent monster gains in commodity prices that followed Russia’s invasion of Ukraine.

The worsening situation in Ukraine led to a fresh surge in prices for raw materials and contributed to the relative outperformance of resources-linked currencies, including the kiwi. In the latest development, Russian military forces seized Ukraine’s Zaporizhzhia nuclear power plant – the largest of its kind in Europe.

The early bombardment by Russian troops on Friday raised fears of an environmental catastrophe and triggered a fresh wave of the global risk-aversion traders. This, in turn, pushed the safe-haven US dollar to the highest level since June 2020, albeit did little to prompt any selling around the perceived riskier kiwi.

Bulls, however, took a breather just ahead of mid-0.6800s, or a resistance marked by the 100-day SMA resistance and preferred to wait for the release of the US monthly jobs report (NFP). The key focus, however, will remain on developments surrounding the Russia-Ukraine saga, which should continue to infuse volatility around the NZD/USD pair.

Technical levels to watch

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