- NZD/USD witnessed some short-covering move on Thursday amid persistent USD selling.
- The ongoing slump in the US bond yields to all-time lows continued weighing on the USD.
- Technical buying above 0.6300 mark accelerates the move during the European session.
The NZD/USD pair rallied over 20 pips and refreshed session tops, around the 0.6325 region in the last hour, recovering the previous day’s negative move to over four-month lows.
The pair showed some resilience below the 0.6300 round-figure mark, rather attracted some dip-buying on Thursday and for now, seems to have stalled its recent bearish trajectory witnessed since the beginning of this year.
The upside is likely to remain capped
Persistent selling surrounding the US dollar – amid the ongoing fall in the US Treasury bond yields to fresh all-time lows – was seen as one of the key factors that extended some support to the major and prompted a short-covering move.
The momentum took along some intraday trading stops near the 0.6300 round-figure mark, which seemed to be a key trigger behind the latest leg of a sudden spike over the past hour or so, albeit the risk-off mood might cap further gains.
Growing concerns over the global outbreak of the deadly coronavirus and its impact on the world economy continued weighing on investors’ sentiment, which should keep a lid on any rally for the perceived riskier currency – kiwi.
Moving ahead, Thursday’s US economic docket, highlighting the release of revised Q4 GDP print and Durable Goods Orders, might influence the USD price dynamics and will be looked upon for some short-term trading opportunities.
Technical levels to watch