NZD/USD hits fresh session peak, retakes 200-DMA and beyond

After an initial dip to sub-0.70 mark, the NZD/USD pair staged a remarkable recovery and is now building on to its momentum back above the very important 200-day SMA.

Currently trading near Friday's peak level, around mid-0.7000s, a pause in the broad based US Dollar rally, led by increasing expectations for a Federal Reserve interest-rate hike and fiscal stimulus by President-elect Donald Trump, helped the pair to recover from nearly 4-month lows and snap eight consecutive days of losing streak. 

The prevalent upbeat sentiment around European equity markets and recovery in commodity prices is indicative of risk-on mood and supportive of demand for riskier, higher-yielding currencies - like Kiwi. 

In absence of any market-moving releases from the US, broader risk sentiment would continue to be a key driver for the pair during NY trading session on Monday ahead of Tuesday's release of NZ quarterly retail sales data and the release of minutes from FOMC latest monetary policy meeting on Wednesday.

Technical levels to watch

A follow through buying interest above 0.7050-60 immediate hurdle might continue boosting the pair further towards its next major resistance near 0.7100 round figure mark. Meanwhile on the downside, sustained weakness back below 0.7025 (200-day SMA) might turn the pair vulnerable to once again break below 0.70 psychological mark and head towards testing 0.6950 horizontal support.