NZD/USD looks to end day with modest gains above mid-0.66s
- The USD weakness boosts the pair on Monday.
- NZD/USD continues to target 0.67.
- Employment report from New Zealand will be the next significant catalyst.
After starting the week with a small bearish gap, the NZD/USD pair gained traction and turned positive on the day above 0.6650. With the greenback remaining under pressure in the second half of the day, the pair extended its up-move and was last seen trading at 0.6670, where it was up 0.1% on a daily basis.
Ahead of tomorrow's highly-anticipated midterm election in the U.S., the greenback struggled to take advantage of last Friday's upbeat employment report and dragged the US Dollar Index below 96.50. As of writing, the DXY was down 0.25% on the day at 96.25. Although today's data from the U.S. showed that the business activity in the service sector expanded at a stronger pace than expected in October, a sharp fall witnessed in the Treasury bond yields didn't allow the dollar to find demand.
- US: Services PMI (final) improves to 54.8 in October from 53.5 in September - Markit.
- US: ISM Non-Manufacturing PMI comes in at 60.3 in October vs 59.5 expected.
During the early trading hours of the Asian session on Wednesday, the Statistics New Zealand will publish the third quarter unemployment rate, which is expected to stay unchanged at 4.5%. Moreover, markets will be paying a close attention to the U.S. election exit polls. “The fiscal/monetary mix has had a big say in the dollar, and that’s why mid-terms are important. Pollsters expect the House to go to the Democrats, which reduce chances of fresh stimulus, raise chances of debt ceiling grid-lock and probably be slightly dollar negative,” ING analysts said previewing the event.
Technical levels to consider
The pair could face the first technical resistance at 0.6690 (Nov. 2 high) ahead of 0.6730 (Aug. 28 high) and 0.6760 (Aug. 8 high). On the downside, supports are located at 0.6630 (100-DMA), 0.6560 (50-DMA) and 0.6500 (psychological level).